The former chair of the United States Council of Economic Advisers warned Monday that the bond markets are flashing red over Donald Trump’s economic agenda.
In a sharply worded MSNBC op-ed titled, “The Bond Market is an Economic Lie Detector Test,” Jared Bernstein, a Biden administration economist, argued that markets are reacting to “a toxic combination” of MAGA-inspired policies that threaten to both raise interest rates and slow growth.
Trump “is failing” the test, according to Bernstein, and “that’s bad news for your wallet," he added.
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“The recklessness of both the Trump administration’s economic agenda and congressional Republicans’ deficit-exploding legislation are playing out in real time in ways you need to know about,” Bernstein wrote Monday. He pointed to the $1.8 trillion deficit in 2024 – 6.4% of GDP – as one factor rattling investors.
When the government borrows more, interest rates climb, he told readers. “Actions have consequences, and financial markets don’t subscribe to the administration’s alternate reality where everything’s fine and under control.”
The noted economist ended his op-ed Monday with a stark conclusion. “In fact, the bond market is loudly saying everything is far from fine — and the folks under control are out of control,” he said.
If Trump and his GOP allies continue down the same economic path, Bernstein warned, the economic consequences could show up in mortgage rates, credit cards, and auto loans.
