Archive · 23 Jun 2025
Economist: U.S. Policy Chaos Poses Biggest Risk to Bond Market
Imagine the bond market as a place where people lend money to the government.
Normally, the government's debt is a worry, but an economist says something else is a bigger problem: how the government makes its plans.
The economist thinks it's the unpredictable decisions made by the government that are scary.
These changes could make bonds less safe.
Also, a possible war could make things more expensive and disrupt supplies.
The bond market is currently calm, but the economist's warning highlights deeper concerns about instability and the value of bonds.
Economist Dario Perkins suggests the biggest risk to the bond market isn't the fiscal deficit.
Perkins identifies 'chaotic U.S. policymaking' as a greater threat to the bond market.
Unpredictable policies could undermine U.S. Treasuries' role as a global risk-free asset.
A potential Israel-Iran conflict could trigger inflation and supply chain disruptions.
The bond market appears to be stable, with yields fluctuating within a narrow range.
- Who
- TS Lombard economist Dario Perkins.
- What
- Economist identifies chaotic U.S. policymaking as the biggest risk to the bond market.
- When
- As a spending bill moves forward.
- Where
- U.S.
- Why
- Unpredictable policies could undermine U.S. Treasuries as a global risk-free asset and potential conflict could trigger inflation and supply chain disruptions.
Those Concerned about the Deficit
Those Concerned about U.S. Policymaking
Source of Risk
Those Concerned about the Deficit
Increased government borrowing due to tax cuts.
Those Concerned about U.S. Policymaking
Chaotic U.S. Policymaking
- Economist
- Dario Perkins
- Risk Identified
- Chaotic U.S. policymaking
- 10-year yield range (since May 23)
- 4.518% to 4.359%
- 30-year yield range (since May 23)
- 5.041% to 4.848%