Treasury Market Promises Trump Voters Higher Inflation

If you are a Trump voter who voted for him because you believe that he would bring down inflation, the largest, most liquid market in the world today is telling you that you are a fucking idiot and you should start saving money to deal with higher inflation once he assumes office. The bond market is making huge moves, as yields are exploding in expectation of higher interest rates which follow inflation. As of this writing, the two-year Treasury Note for United States debt is up 2.5 percent, the ten-year is up a staggering 4.3 percent, and the 30-year is up 4.78 percent. Borrowing costs will be higher under Trump’s administration, that much is clear so far.

The markets all year have been making a “Trump trade,” a hedge against his racist immigration and insane tariff policies that many high-level traders expect to bring high inflation and low growth, two of the three elements that create stagflation, literally the worst thing that can happen to an economy. The entire market is way up today, especially bank stocks, as the typical expectations around Republicans not regulating capitalism are fueling rallies everywhere you look.

But the bond market is where all the smartest money resides, and they are shouting from the rooftops this morning: inflation isn’t going away, and if Trump passes his agenda, he’ll bring it back with a vengeance.