Trump Bond Crisis Worsens, North Korea Humiliates Trump With Missile Launch

The U.S. Treasury was forced into an extraordinary intervention in the bond market on Wednesday, announcing it would at least double its purchases of long-term government debt in a bid to contain a sell-off that has sent yields to nearly two-decade highs. The move came as Trump simultaneously pursued a diplomatic overture to North Korea that was met with a missile launch and a humiliating rebuff, illustrating the compounding pressures on American power abroad and at home.

The Bond Market Intervention

The Treasury's decision to increase buybacks of securities maturing in 10-to-20 and 20-to-30 years from $2 billion to at least $4 billion represents what the hosts describe as "extraordinary action" and a clear signal of concern. The mechanism involves using short-term debt to purchase long-term debt — effectively borrowing from Peter to pay Paul — in an attempt to bring interest rates down immediately.