President Donald Trump said the volatile swings in the bond market earlier this month and the sinking U.S. stock market weren’t the reason for implementing a 90-day tariff pause on U.S. trading partners.
“I wasn’t worried,” Trump said in a Time magazine interview, discussing the pressure the bond market faced after he unveiled new tariff plans at a “Liberation Day” announcement at the White House’s Rose Garden.
The bond market, a traditional safe haven backed by the full faith and credit of the U.S. government, infrequently sees big swings, yet this month it had one of its biggest short-term moves ever, with the 10-year Treasury yield falling slightly below 4% around April 4, and then by April 11 it topped 4.5%. Yields trade inversely to prices.
Around this time, Trump was also trolling Federal Reserve Chairman Jerome Powell, calling him “Mr. Too Late” and hinting at firing him for not cutting interest rates, which contributed to the volatility. But he has since said he has no intention of firing him.
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Rising yields equal higher borrowing costs, especially for the 10-year, which dictates mortgage rates as well as personal and auto loans.
On Friday, it trended down to 4.267%. Treasuries have fluctuated between roughly 3.59% and 4.81% over the past 12 months.
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S&P 500 Exits Correction Territory
At the same time, stocks sank from record highs, but have since recovered some of those losses. The S&P 500 exited correction territory this week, rebounding from a 10% drop. Still, the Dow, S&P and Nasdaq remain down from their record highs by 5.7%, 10% and 6%, respectively, through Friday.
“The bond market was getting the yips, but I wasn’t. Because I know what we have. I know what we have, but I also know we won’t have it for long if we allowed four more years of gross incompetence. This thing was just running — it was running as a free spirit. This was— this was the most incompetent president in history,” Trump told Time magazine, referring to the Biden administration.
Trump, during his April 2 remarks, used a poster board to show combined rates of tariffs, other non-tariff barriers and currency manipulation by trading partners on U.S. goods, alongside the reciprocal tariffs the Trump administration plans to levy on imports from those countries. The administration later revealed the calculation included the U.S. trade deficit with those countries.
The 90-day pause was not influenced by bond market chaos, but rather Trump’s goal to recalibrate tariffs.
“No, it wasn’t for that reason,” he said. “I’m doing that until we come up with the numbers that I want to come up with. I’ve met with a lot of countries. I’ve talked on the telephone. I don’t even want them to come in.”
As for trade talks, Trump on Friday gave an update on his talks with Chinese President Xi Jinping. “I spoke to him numerous times,” he said en route to the funeral for Pope Francis in Italy.
“I’m getting along very well with Japan. We’re very close to a deal,” he added.
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