Explainer
The Bond Investors Who Got Trump to Pause His Tariffs
How “bond vigilantes” — who collectively act out of self-interest — keep governments in check.
In the days before the April 9 launch of his long-awaited tariffs on most imports to the US, President Donald Trump was unwavering. He didn’t flinch when the stock market plunged, wiping out more than $6 trillion in market value. And he was unmoved when a chorus of foreign leaders — and some members of his own party — registered their opposition to the tariffs.
But in the hours after the tariffs went into effect, the Treasury bond market tanked. Many bond investors, concerned that the duties would accelerate inflation and reduce foreign demand for US assets, started dumping their holdings in order to pressure the administration to reverse course.