So, it looks as though Donald Trump 'blinked' (i.e. panicked) and reverses all of his tariff increases of the past few days with the exception of China and set a rate of 10% for everyone. The inside story is that it was the operation of the bond markets that forced a change in strategy and what we are seeing is very similar to the financial moves that brought down Liz Truss ad Kwasi Kwarteng After a week of economic chaos and criticism from allies, what changed? Not just pressure from businesses or Republicans —Trump was rattled by a bond market in meltdown mode. The bond market is where the US government borrows money by selling Treasury bonds. These are usually seen as ultra-safe investments. If investors stop buying them—or worse, start selling them—it is a sign of deep concern. Without steady demand for these bonds, the government could trouble funding everything from infrastructure to defence. That's why a selloff in this market causes panic—it suggests serious instability, and potentially, a crisis. By Wednesday, however, it had become evident the campaign to convince Trump to change course would not let up. It had also become plain after a sharp sell-off in US government bond markets — usually a safe corner for investors — that the economic ramifications of the president’s strategy were potentially catastrophic and worse than his advisers had previously predicted. The growing alarm inside the Treasury Department over developments in the bond market was a central factor in Trump’s decision to hit pause on his 'reciprocal' tariff regime, according to three people familiar with the matter. Treasury Secretary Scott Bessent raised those concerns directly to Trump Wednesday in a meeting that preceded the pause announcement, underscoring concerns shared by White House economic officials who had briefed Trump on the accelerating selloff in the US Treasury market earlier in the day. Calls to top White House advisors from key business community allies also increasingly focused on the troubling developments in the bond market as they made the case for Trump to pull back. No doubts, whole books and PhD theses may be written on the events of the past few days but at the risk of an extreme analogy, it looks as though the 'immune system' of the capitalist system (the bond market) has activated procedures to defend the whole of the system. The rate set by the bond markets is what governs mortgages, credit card payments, car purchase and other day-today financial transactions and if ever single America citizen were to be suddenly hit in the pocket, then perhaps it is no wonder that Trump realised that the game was up. A 90 day pause seems an eternity given what has happened in the last few days and the big question remains as to what happens at the end of the 90 day period. But a period of stability that pause brings might allow cooler and more rational decision making to be made and we might be saved from an economic and financial armageddon.
To return to more mundane matters, I save a lot of useful material in A4 document wallets which are readily accessible on the shelves of a proximate bookcase. Some of these are of great importance such as income tax records, council tax transactions, a 'household maintenance file' and so on. But others are a lot more transient such as a recipe I wish to keep or some health/diet related press cuttings. I took the opportunity to throw away a lot of the transient material by keeping that which I still considered relevant and discovered, by the way, some notes on the preparation of a haddock fish pie. But the other 'big' files do require a more radical thinning but this is not a case of simply throwing away as, in general, there are names and address that end to be excised and then shredded and this slows the whole of the thinning process down somewhat, But I have made a very good start and my shelf full of files looks altogether much more manageable and fit for purpose.
Yesterday was my 'sit' day when a carer comes to sit with Meg whilst I go out and do my weekly groceries shopping. But I got a message from the agency telling me that the carer allocated to the sit session would be delayed by a couple of hours. Then this message changed and I was expecting someone at 11.15 but it actually turned out to be half and hour later so I did not get out and do my shopping until practically midday. However, I usefully occupied my file by going systematically through twelve years of financial records that I wished to junk. But I needed to go through several inches of paperwork to ensure that names, addresses and any identifiers were excised from each document (my scissors were working overtime) before I felt I could safely throw the out-of-date documents way. Even so, I ensured that all of these papers were secured into one stout envelope and then again bound into an old file before they were consigned to the green recycling bin. I have two more large files to go through but in the case of the 'House Maintenance file' there may well be suitable addresses of tradesmen who have jobs for us in the past that I would want to keep.
The USA media are reporting that 'Liberation Day' just gave way to 'Capitulation Day'. US President Donald Trump pulled back yesterday on a series of harsh tariffs targeting friends and foes alike in an audacious bid to remake the global economic order. Trump's early afternoon announcement followed a harrowing week in which Republican lawmakers and confidants privately warned him that the tariffs could wreck the economy. His own aides had quietly raised alarms about the financial markets before he suspended a tariff regime that he had unveiled with a flourish just one week earlier in a Rose Garden ceremony. The stock market rose immediately after the about-face, ending days of losses that have forced older Americans to rethink their retirement plans. However, we are not out of the woods yet and the UK economy is still to be hit by the 10% tariff and the challenge has not gone away. The EU has also announced that it will suspend retaliatory counter tariffs for the next 90 days but reserves the right to re-introduce them unless a satisfactory deal is negotiated.
© Mike Hart [2025]