# Treasury Bond pressure as an international response to Trump's tariffs and Carney's supposed role **URL:** \ **Category:** Politics & Elections\ **Tags:** trump\ **Created:** [April 11, 2025, 3:06pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908 "2025-04-11T15:06:15Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![FluffyBob](https://avatars.discourse-cdn.com/v4/letter/f/ecb155/32.png) [@FluffyBob](https://boards.straightdope.com/u/FluffyBob)\ **Post date:** [April 11, 2025, 3:06pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/1 "2025-04-11T15:06:15Z")
So this has appeared this morning: [Carney’s clever Bond Play - Dean Carnell](https://www.google.com/search?q=dean+blundell+carney+bond+play&sca_esv=551b6e6a4982d666&rlz=1C1RXQR_enCA1155CA1155&sxsrf=AHTn8zr_iV_-K23-TCH_Pfed0A-MBDpmxg%3A1744382990532&ei=Diz5Z5iZIIuk0PEP0PTqsQs&ved=0ahUKEwiY2IKEndCMAxULEjQIHVC6OrYQ4dUDCBA&uact=5&oq=dean+blundell+carney+bond+play&gs_lp=Egxnd3Mtd2l6LXNlcnAiHmRlYW4gYmx1bmRlbGwgY2FybmV5IGJvbmQgcGxheTIFECEYoAEyBRAhGKABMgUQIRigATIFECEYoAFIk-ICUIW2AlivxwJwBXgAkAEAmAF0oAG3BKoBAzQuMrgBA8gBAPgBAZgCBqACgwTCAgcQIxiwAhgnwgIIEAAYgAQYogTCAgUQABjvBcICCBAhGKABGMMEwgIEECEYFZgDAIgGAZIHAzUuMaAH9xayBwM0LjG4B4AE&sclient=gws-wiz-serp) I did not know of Dean Carnell before this morning. I had read about treasury bond pressure from Japan and China being a tool in their hands, and Carney obviously would have exceptional experience and understanding of this sort of thing. The Economist does have an article [raising concerns about the bond situation](https://www.economist.com/finance-and-economics/2025/04/09/bond-market-convulsions-look-extremely-dangerous), but it is not about the trade war particularly. Sorry, their gift link is only good for a single recipient, so I did not use one. Just wondering what dopers think. I know very little about such things, and although I think Carney is Canada’s best choice right now, this take comes of as - I dont know - political glurge? hero narative? ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [April 11, 2025, 3:11pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/2 "2025-04-11T15:11:19Z")
So, especially since you didn’t link an article about it, could you care to tell us what the bond play was? ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [April 11, 2025, 3:15pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/3 "2025-04-11T15:15:32Z")
Apparently Canada has been buying US bonds to sell off to tank the US dollar if necessary in an economic war. From what I can see, that’s just speculation so far. ---
**Author:** ![elbows](https://avatars.discourse-cdn.com/v4/letter/e/b3f665/32.png) [@elbows](https://boards.straightdope.com/u/elbows)\ **Post date:** [April 11, 2025, 3:45pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/4 "2025-04-11T15:45:53Z")
Carney’s deft hand. Coordinate, then quietly begin to sell bonds till someone at the fed notices. Entirely behind the scenes, no confrontation, nothing loud or announced. Just showing America it’s not always about the LOUD confrontation. He didn’t bend knee or kiss ring. ---
**Author:** ![FluffyBob](https://avatars.discourse-cdn.com/v4/letter/f/ecb155/32.png) [@FluffyBob](https://boards.straightdope.com/u/FluffyBob)\ **Post date:** [April 11, 2025, 3:58pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/5 "2025-04-11T15:58:51Z")
Uh, sorry? I did give links. I read this initially in an [Imgur post](https://imgur.com/gallery/canada-countering-trump-s-tariffs-sFzxeb1), for what that is worth. I gave a link to a google search on it instead that returned many reposts, because I could not find the original source. I do not read any blogs or have log ins for any x, bluesky, facebook etc. I thought this was being reasonable way to introduce it. I am not an expert in this in any way, so I doubt my summary is accurate. Basically a large amount of US treasury bonds are held by Japan (most), China (next), Europe and appearently Canada. A slow sell off of bonds will raise US interest rates, increase US federal debt and drive the US dollar down. How this can be so subtle and clever and have been a major factor influencing Trump is unclear to me. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [April 11, 2025, 4:49pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/6 "2025-04-11T16:49:16Z")
As I understand it, the story is as follows. Note this is mainly opinion, backed by some slim facts. Canada started buying US treasuries months ago, ostensibly for the purpose of financial security. Shortly after Mark Carney became prime minister, he travelled to Great Britain and France. These were not photo-ops. As someone with a great deal of background in international finance (he was governor of the Bank of Canada and the Bank of England), he had connections. Discussions were had. When Trump announced his idiotic tariffs, the stock market plunged of course. When stocks plunge, normally people retreat to the safety of US treasuries, and the price of them goes up, making interest rates go down. This would have been OK with the US administration, as it would have led to cheaper interest rates, and less money going to pay the debt. HOWEVER. Canada, UK and France sold off US treasuries from their stockpile in the face of the stock market drop, which is totally contrary to what was expected. This led to a decrease in the price of treasuries, and an INCREASE in interest rates. This was entirely unexpected, and led people with financial knowledge to completely freak out. This then led directly to Trump’s reversal of course before 24 hours was out. There was the danger of a complete and total meltdown, as has happened in the past. Canada and friends played the game - showing without announcement or fanfare that there are tools at the world’s disposal to crush the US economy whenever we chose. Interestingly, just a day or so ago, Japan (largest US bondholder) announced that they do not intend to sell their massive US bond holding. The message was pretty clear - they did not do the selling (this time), and the unspoken part was “we will not sell … YET”. The Trumpers are picking a fight with the entire world at this point. They’re not going to win this. ---
**Author:** ![Vlad\_Igor](https://avatars.discourse-cdn.com/v4/letter/v/7feea3/32.png) [@Vlad\_Igor](https://boards.straightdope.com/u/Vlad_Igor)\ **Post date:** [April 12, 2025, 11:19am UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/7 "2025-04-12T11:19:50Z")
Thank you for your explanation. I don’t know much about macroeconomics, but I’m aware that Trump is pulled along by it like a nose ring on a bull. I saw headlines and read articles about treasury bills but it didn’t make sense. You mentioned that the economy has tanked before from this scenario - when was that, and what happened? ---
**Author:** ![Pardel-Lux](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pardel-lux/32/20182_2.png) [@Pardel-Lux](https://boards.straightdope.com/u/Pardel-Lux)\ **Post date:** [April 12, 2025, 12:38pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/8 "2025-04-12T12:38:44Z")
Two days ago a very similar argument to **Euphonious\_Polemic** ’s explanation was posted in Substack by a Canadian named Dean Blundell: > **[Carney’s Checkmate: How Canada's Quiet Bond Play Forced Trump to Drop Tariffs](https://deanblundell.substack.com/p/carneys-checkmate-how-canadas-quiet)** > > Carney, Japan And The EU proved America's Idiot Emperor Has No Clothes The Canadians are mentioned proudly, and so is Japan and the EU, mentioning a total of almost two trillion $ that could be sold, depressing the US economy, making its debt more unsustainable, limiting the government’s abillity to act. What is not yet included in that calculation are the bonds held by China. Investopedia writes that China held 770 $billion of US debt last november: > **[5 Foreign Countries That Own the Most U.S. Debt](https://www.investopedia.com/articles/markets-economy/090616/5-countries-own-most-us-debt.asp)** > > The list of names and amounts of U.S. debt held by the five foreign countries that own the most and why. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [April 12, 2025, 12:45pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/9 "2025-04-12T12:45:05Z")
I’m pretty sure that making China stronger compared to the US was one of Trump’s intended goals with all of his manipulations. ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [April 12, 2025, 1:08pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/10 "2025-04-12T13:08:15Z")
If you put any credence in Snopes, [their take](https://www.snopes.com/news/2025/04/11/canada-mark-carney-treasurys-sell-off/) is that there’s no evidence of any intentionally coordinated sell-off scheme. This is speculation coming entirely from a Canadian podcaster named Dean Blundell. Note that Snopes carefully avoided disputing that it happened, their only strong position is there’s no _evidence_ of intentional coordination. Usually in uncertain market conditions, investors flee to US treasuries as a safe haven. But last week the opposite happened, treasuries were being dumped on a large enough scale to drive up 30-year yields. This behavior is opposite to typical expected investor behaviors, and as such, it seemed to be calculated (successfully) to pressure Trump to pull back on tariffs. Though the identity of the coordinators and participants remains unknown, I think there’s a very strong circumstantial case that this was done intentionally. (Side point, this is a totally fair gambit in a trade war, and Trump would do well to heed the demonstration of power that presented last week). ---
**Author:** ![penultima\_thule](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/penultima_thule/32/3833_2.png) [@penultima\_thule](https://boards.straightdope.com/u/penultima_thule)\ **Post date:** [April 12, 2025, 3:07pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/11 "2025-04-12T15:07:30Z")
> [@Chronos](#): > > I’m pretty sure that making China stronger compared to the US was one of Trump’s intended goals with all of his manipulations. I’ll accept the argument that making China stronger (inc the USD weaker) might have been an inevitable consequence of 45/47’s asinine manipulations. I don’t accept the concept that it was intentional. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [April 12, 2025, 3:16pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/12 "2025-04-12T15:16:48Z")
All you have to assume is that China has some sort of leverage on Trump, personally. Could be kompromat, could just be an offer of a direct payment. Given a choice between what’s good for the country and what’s good for Donald J. Trump, he’ll chose the latter every time. ---
**Author:** ![UDS1](https://avatars.discourse-cdn.com/v4/letter/u/e47774/32.png) [@UDS1](https://boards.straightdope.com/u/UDS1)\ **Post date:** [April 13, 2025, 3:20am UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/13 "2025-04-13T03:20:41Z")
> [@HMS\_Irruncible](#): > > Usually in uncertain market conditions, investors flee to US treasuries as a safe haven. But last week the opposite happened, treasuries were being dumped on a large enough scale to drive up 30-year yields. This behavior is opposite to typical expected investor behaviors, and as such, it seemed to be calculated (successfully) to pressure Trump to pull back on tariffs. > > Though the identity of the coordinators and participants remains unknown, I think there’s a very strong circumstantial case that this was done intentionally. (Side point, this is a totally fair gambit in a trade war, and Trump would do well to heed the demonstration of power that presented last week). There is an alternative account which does not involve a co-ordination or conspiracy. It goes like this: Usually in uncertain market conditions, investors flee to US treasuries as a safe haven. But when the uncertain conditions are caused by the monstrous stupidity of the US government, which is in the hands of a man such as Trump, US government securities don’t look like such a safe haven any more, so the opposite happens. Not only do investors looking for a safe haven look elsewhere, but those currently holding US bonds start to divest and look elsewhere. This is pretty much what happened when the UK made the monstrously stupid Liz Truss Prime Minister and she embarked on economic policies pretty much as stupid as Trump’s tariffs. The UK’s constitutional arrangements are capable of rapid response when it becomes clear that a disastrous mistake has been made; the policies were reversed and Truss was dumped as PM within days. But long-term damage had been done; if the UK had done something so stupid that it was previously thought impossible, then clearly it could do something similarly stupid again, and so the UK government bond market did not fully recover; an increased risk premium was now priced in. The US’s constitutional arrnagements are more rigid. Trump cannot be dumped so easily and, certainly, so speedily. But other checks and balances intervened and Trump was, um, persuaded to defer the most egregiously stupid of his tariffs. Still, obviously nobody can be confident that he won’t try again to destroy the financial and economic standing of the US and its government. So — if this account of the reason for the selloff is correct — we would expect US Treasury bonds not to return, or not to return fully, to their pre-stupidity levels. And, lo, so far they have not. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [April 13, 2025, 7:36am UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/14 "2025-04-13T07:36:46Z")
Count me in as dubious about the OP. Crushing the US Treasury market is hard and foreign governments, while large, are a small part of the US bond market. The way they exert influence is typically by _announcing_ what they are doing, to get reinforcement from private bond and currency traders. (The Fed, on the other hand, is all-powerful at setting overnight US interest rates.) The rumors posit foreign governments subtly influencing the bond market, and I don’t think big moves follow from small nudges unless they are _really_ well timed. Moreover, if foreigners dump US Treasuries, the Fed can buy them up. And the Fed has more firepower than foreigners do. (Though the full argument needs to take foreign exchange issues into account.) That said, last week the treasury market cratered and there are problems in the US monetary plumbing system. Paul Krugman: > The topic of how Trump’s policies have messed with the bond markets – including the market for US Treasuries – is too difficult for me to cover today, but [here’s more](https://www.crisesnotes.com/our2025lehmanbrothers/) **.** The key point is that massive tariffs have disrupted the plumbing of the financial system, leading to soaring interest rates on U.S. government debt. That’s abnormal: [rising odds of a recession](https://kalshi.com/markets/kxrecssnber/recession) usually lead to falling long-term interest rates, because the prospect of a recession raises the likelihood of future cuts by the Fed, which controls short-term rates. This time, however, rates are spiking, especially for very-long-term instruments like 30-year bonds, shown at the top of this post. > The common thread in currency and bond markets is that, thanks to Trump, dollar assets — traditionally the foundation of the global financial system — are no longer perceived as safe. > The combination of interest rates soaring amid a slump and the currency plunging despite rising interest rates isn’t what we normally expect for advanced countries, let alone the owner of the world’s leading reserve currency. It is, however, what we often see in emerging-market economies. That is, investors have started treating the United States like a third-world economy. So we have 2 things going on. One involves the decline in US governance and the corresponding response by international markets. The other involves vulnerabilities in the US banking and financial system, imperfectly fixed after the 2008-2010 financial crisis and coming to a head at present. These vulnerabilities are imperfectly understood: the go-to guy is Nathan Tankus whose posts are difficult to read because the subject matter is granular and [we’re doing it live](https://en.wikipedia.org/wiki/We%27ll_do_it_live). Link to Tankus in Krugman’s first quote box above. There is a lot of ruin in a nation: we have tough conceptual problems and also very stupid problems caused by an erratic President surrounded by yes-men. ---
**Author:** ![elbows](https://avatars.discourse-cdn.com/v4/letter/e/b3f665/32.png) [@elbows](https://boards.straightdope.com/u/elbows)\ **Post date:** [April 13, 2025, 8:25am UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/15 "2025-04-13T08:25:42Z")
But wasn’t Carney Governor of the Bank of England when that Truss business happened? Working silently, behind closed doors, take no credit make no boast is kind of his super power, I think. Let the outcome speak for itself. ---
**Author:** ![UDS1](https://avatars.discourse-cdn.com/v4/letter/u/e47774/32.png) [@UDS1](https://boards.straightdope.com/u/UDS1)\ **Post date:** [April 13, 2025, 8:37am UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/16 "2025-04-13T08:37:22Z")
> [@elbows](#): > > But wasn’t Carney Governor of the Bank of England when that Truss business happened? Carney left that position two-and-a-half years before Truss became PM. ---
**Author:** ![elbows](https://avatars.discourse-cdn.com/v4/letter/e/b3f665/32.png) [@elbows](https://boards.straightdope.com/u/elbows)\ **Post date:** [April 13, 2025, 8:40am UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/17 "2025-04-13T08:40:48Z")
I misplaced the whole Truss timing, thanks for the correction! ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [April 13, 2025, 6:36pm UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/18 "2025-04-13T18:36:39Z")
> [@elbows](#): > > Working silently, behind closed doors, take no credit make no boast is kind of his super power, I think. Let the outcome speak for itself. Well, we need people like that. The US has traditionally lead efforts to stabilize global financial crises. Not because the US was _nice_, but because it was rational and because it was capable, unlike much smaller countries acting alone. Now the rest of the world has to level up quickly. There are plenty of consultations to be made. I’m just saying that the scenario sketched by Dean Carnell doesn’t sound like it would work and there are other hypotheses favored by people who study this full time. Separately, Nobel Laurette Paul Krugman has a solid analytic track record, I am not familiar with Dean Carnell, and his breathless commentary doesn’t indicate any great knowledge: > What Happens in a Coordinated Sell-Off? > If countries like Canada, Japan, and the EU start selling bonds together (even slowly): > > - Flood of Bonds: Too many bonds hit the market at once. > - Prices Drop: More supply than demand pushes bond prices down. That’s not how the bond market works and the Federal Reserve would catch wind of such shenanigans. The Fed’s ability to buy bonds outweighs foreign central banks’ abiity to sell them. There might be some way of carrying out such a plan but Mr. Carnell doesn’t explain it, which makes me think he doesn’t know what he’s talking about. ETA: Everyone here is a political junky and last weeks bond market turmoil might be part of a very large story, alongside the degradation of US democratic institutions. Paul Krugman has a piece out today which I’m reading now: > **[A Financial Crisis Primer, Part I](https://paulkrugman.substack.com/p/a-financial-crisis-primer-part-i)** > > How things can go catastrophically wrong ---
**Author:** ![The\_Librarian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/the_librarian/32/402_2.png) [@The\_Librarian](https://boards.straightdope.com/u/The_Librarian)\ **Post date:** [April 14, 2025, 6:38am UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/19 "2025-04-14T06:38:22Z")
That is the second post in a row that asserts that the Fed has total control of the market for US treasury bonds. Sure they can put a fat finger on the scale, but why do you think anyone was selling bonds in the first place? (If the fed can just buy them without limit) If the nations holding large US dollar reserves start dumping them there is fuck all the fed can do about it. The interest rate for new US bonds will skyrocket, the dollar will tank (and much of the world’s economy will be in tatters). Even only the threat of such was dire enough to let Donny eat crow promptly. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [April 14, 2025, 6:47am UTC](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908/20 "2025-04-14T06:47:05Z")
> [@Measure\_for\_Measure](#): > > The Fed’s ability to buy bonds outweighs foreign central banks’ abiity to sell them. …but not the ability to handle a wave of private investors selling their bonds and taking their money out of the country. If the Fed buys bonds, releasing money into the system in the face of a collapsing dollar that would be inflationary. The Fed has total control over short term interest rates but only leverage on long term interest rates. Also, discussing foreign central bank interventions without mentioning the Fed’s response isn’t a sign of great expertise. Here’s another guide to next week. Noah Smith: > **[This is called "capital flight"](https://www.noahpinion.blog/p/this-is-called-capital-flight#footnote-4-161142780)** > > It usually only happens to poor countries, and it never ends well. > it’s helpful to understand that U.S. bond yields going up while the dollar goes down is actually a _highly unusual and scary situation_ . [Next page](https://boards.straightdope.com/t/treasury-bond-pressure-as-an-international-response-to-trumps-tariffs-and-carneys-supposed-role/1016908.md?page=2)