The US is scooping up treasury bonds in an effort to raise their price and push yields down – but it’s not working

The bond market is driving the Trump administration crazy. Last week, the treasury secretary, Scott Bessent, announced that the government would sharply ramp up its purchase of treasury bonds, in an effort to raise their price and thus push down their yield, which amounts to the interest rate the government pays on its debt.

It didn’t quite work as planned. Yields on treasurys fell after Bessent’s bond market intervention but soon bounced back. By Friday afternoon, the yield on the 10-year treasury was back near where it was before the secretary’s announcement. The yield on the 30-year bond was again trading around its highest level in 20 years or more.

Investors will hope Kevin Warsh offers ‘comfort blanket’ at annual meeting of central banks amid bond market anxiety

The new US Federal Reserve chair, Kevin Warsh, faces a critical test this week amid anxiety in government bond markets over inflation and Donald Trump’s tax and spending plans.

As the world’s most powerful central bank prepares for its annual Jackson Hole conference, analysts said bond traders would be looking for signals from Warsh over its commitment to fighting inflation.

Breakdown shows Washington now prioritises its own interests over any semblance of shared economic ground

• ‘No more!!!’: Trump lashes out after US-Canada talks devolve into trade war

The calamitous collapse of trade negotiations between Canada and the United States is a warning to nations worldwide that pursuing any kind of dialogue with the current US administration is doomed at the outset, according to observers who say this recent episode indicates seeking a fair deal is futile.

Andrea Lawlor, an associate professor of political science at McMaster University in Ontario, said: “No matter the closeness of the historical relationship, the American administration has signalled that it now prioritises its interests above those of some sort of global economic coordination or harmony.

Treasury secretary Scott Bessent’s attempt to calm bond markets is a sign of weakness not strength

“Look, there’s nothing magic about that $40tn number,” the US Treasury secretary, Scott Bessent, told CNBC insouciantly last week, as the country’s debt mountain surpassed another bleak record.

Yet Bessent’s decision to intervene in government bond markets in an effort to combat soaring yields belied his studied calm in TV interviews – and reignited fears the US may be on the road to a debt crisis.

As yields are dragged higher in the UK, Europe and Japan, the impact for consumers and businesses will be far-reaching

• ‘Starve the beast’? The $40tn cost of Republicans’ false promises to cut spending

Government borrowing costs around the world have surged to the highest levels in decades amid growing fears over US bond market turmoil.

Anxiety about Donald Trump’s handling of the US economy, and concern that the US president’s war with Iran is driving up inflation, are causing a sell-off in the US bond market.

The enormous US debt under Trump will hobble the next Democratic administration – just as the GOP planned

• Why is the Trump administration causing turmoil in the bond markets?

You could pin the US’s staggering $40tn in government debt to Donald Trump’s Keystone Cops-style governance. Tariffs he sold as a new source of revenue were struck down by the supreme court, forcing the government to return tens of billions of dollars to importers. Elon Musk’s “department of government efficiency” (Doge), ostensibly created to stop wasteful government spending, decimated federal programs and probably killed millions of children, but did nothing to close the budget deficit. The burst of inflation following Trump’s misguided adventure in Iran sharply raised the cost of serving the government’s obligations.

Yet as the federal debt hits an all-time high, up from about $35tn when Trump took office less than two years ago, it is worth noting that the US’s gargantuan indebtedness is in fact the product of a longstanding Republican strategy that took shape well before Trump could even dream about gold-plating the White House. It was called “starve the beast”.