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Let's clarify what happened. Who capitulated here and why? I don't want to say this because I'm a patriot, I'm an American, but the White House is the one that capitulated.
US President Donald Trump was forced to back down from his tariff plans due to severe shocks to the bond market, which could cause an economic collapse.
In addition to causing turmoil in the stock market, Trump's sweeping tariff plans triggered a sell-off in US Treasury bonds, something that had not happened before since the pandemic crisis.
Experts say this, and not just the "art of the deal," was what forced the White House to back down on its tariff proposals. The US president announced a 90-day pause on all new "retaliatory" tariffs yesterday, in a major reversal that sparked one of the biggest stock market rallies in history.
However, it did not exclude China, hitting Beijing with a new round of tariffs.
Fox Business correspondent Charlie Gasparino said the bond market collapse forced Trump to "capitulate" on his plans.
"Let's clarify what happened. Who capitulated here and why? I don't want to say this because I'm a patriot, I'm an American, but the White House is the one that capitulated based on everything I hear and all my sources.
"And the reason is the bond market. When 10-year bond yields rise to 5%, things start to get serious. When the credit markets shake out," he said.
The bond market sell-off peaked late Tuesday and Wednesday. The yield on the 10-year U.S. Treasury note rose overnight to above 4.51%, while the yield on the 30-year Treasury note hit 5.02% on Tuesday night, CNBC reported.
U.S. Treasury bonds are traditionally considered one of the safest assets in the world and a place where investors can put their money during periods of volatility.
Gasparino claimed that, according to his sources, while Trump was negotiating with Japan, it was rejecting U.S. government bonds “because they thought this was not a great place to do business.” “That forced them,” he said, referring to the White House.
Treasury Secretary Scott Bessant insisted that the decision to delay tariffs was driven by "the president's strategy" and not by the shocking rise in bond yields. "We had a long conversation on Sunday, and that was his strategy from the beginning," he told reporters outside the White House on Wednesday.
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