Chris Temple, editor and publisher of The National Investor, said President Donald Trump’s tariffs trade plan is not the only contributor to the behavior seen in the U.S. stock market in recent days, explaining how the president’s trade plan is only a small part of a larger shift in the global economy.
Noting how the stock market initially dropped about 10 percent after Trump announced new tariffs last week then rebounded after the president issued a 90-day pause on tariffs for all countries except China, Temple said the market activity reflects further stress from debt and inflation.
“We are at a very pivotal time in history. The world order is changing. Globalization was unraveling long before Donald Trump came into the Oval Office again. We have debt stress in the world, currency stress in the world, and coming into this year, we had a stock market that was already way out over its skis because of all the money printing by the Federal Reserve a few years ago that juiced everything. So the market was already due to come down,” Temple explained on Thursday’s edition of The Michael Patrick Leahy Show.
Temple argued that the bond market is the more important barometer of the economy’s structural problems, considering its activity within the last few days.
“To me, the most important thing to understand in the last few days is the behavior of the treasury market. As one would expect, treasury bonds rallied and yields dropped very briefly to low 4 percent on a 10-year when the stock market corrections started, but then all of a sudden we had one of the biggest spikes in long-term yields of anything I remember,” Temple explained.
“Yields are still staying up despite what was the most tame inflation number this morning that we’ve seen in a while. So there’s a lot of else that’s going on,” Temple added.
Temple said the bond market is in rebellion over federal fiscal irresponsibility and investors’ lack of confidence in the U.S. government’s ability to manage its debt.
“I think that the market is as preoccupied or more with the size of the federal debt, the size of this year’s deficit, which is likely to exceed last year’s, and I hate to say, but the inability of Republicans and Congress to do anything meaningful to convince the markets that they are serious at all about reducing spending,” Temple said.
“That’s what the markets are obsessed with as much as anything…We have a government that once again is all hat, no cattle when it comes to actually cutting spending,” Temple added.
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Kaitlin Housler is a reporter at The Tennessee Star and The Star News Network. Follow Kaitlin on X / Twitter.
