Wall Street and the City of London are making their stratagem for dealing with the unpredictable but manipulable American President-elect quite clear, through comments by its spokesmen and in recent articles in the Western financial press.
For example, Reuters columnist Gabriel Rubin (an eight-year veteran of the Wall Street Journal) published an article on Dec. 18 headlined “Donald Trump will meet his match in bond markets,” which proposes that the way to make sure that Trump doesn’t do anything not to Wall Street’s liking, is to tame him by blowing out the U.S. bond market. “Donald Trump has bullied and bluffed his way through boardrooms, backrooms, newsrooms, courtrooms and even the White House Situation Room. There’s no room, however, for his blustering bravado in the bond market,” a cocky Rubin begins. He denounces Trump’s “profligate plans” which will make the Federal debt soar way beyond its current $35 trillion level, and says that Trump will have to cut government spending whether he likes it or not. If he doesn’t do as told, interest rates will rise, “making U.S. debt even more costly to issue.”
Rubin then really gets rolling: “A credit downgrade or outburst from a small group of so-called bond vigilantes is all it would take to weaken demand and push yields higher. Such conditions could lead banks to book losses on their portfolios and cause markets to seize up in a more extreme version of what happened during Silicon Valley Bank’s meltdown in 2023.”
