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Trump Pauses Tariffs After Yields Surge: 'Bond Vigilantes Hit Another Homerun,' Experts Point To Bond Market Panic For Reversal

Amid several theories on why President Donald Trump paused the tariffs hours after they went into effect, experts have been pushing the bond market turmoil as the major contributor to the decision.

What Happened: After the 10-year Treasury yields rose 34 bps from below 4.0% last week to nearly 4.34% on Wednesday, experts are pegging Trump’s reaction to pause the tariffs on the spike in yields.

Ed Yardeni from Yardeni Research said, “Bond vigilantes hit another homerun.” A bond vigilante is a bond market investor who protests against monetary or fiscal policies considered inflationary by selling bonds, thus increasing yields.

Yardeni resurfaced his 1983 quote after the yield spike and said, “Bond investors are the economy’s bond vigilantes. … So if the fiscal and monetary authorities won't regulate the economy, the bond investors will. The economy will be run by vigilantes in the credit markets."

Meanwhile, economist Craig Shapiro said, “China, just by threatening to sell USTs, basically blew up the bond market and forced the admin to backtrack.”

However, Trump, in his Truth Social post, said he decided to pause the tariffs based on the negotiation attempts by 75 countries without any retaliation. But Shapiro added in his tweet, “He didn’t admit the bond market had anything to do with this. He said he’s been thinking about it for days. Whatever. It was a flawed rollout.”

He didn't admit the bond market had anything to do with this. He said he's been thinking about ...

https://www.benzinga.com/25/04/44729384/trump-pauses-tariffs-after-yields-surge-bond-vigilantes-hit-another-homerun-experts-point-to-bond-market-panic-fo