When you get two failed auctions in one week, one from the main issuer of global debt (the U.S.) and the other from one of its largest buyers (Japan), you’ve got a real problem. Global yields have been rising steadily, and now we’re witnessing the 30-year Treasury breach 5 percent, a level not seen since the peak inflation panic of 2023. What in the hell is going on?

You could argue the stability of the bond market was already fragile, but the latest moves from the Trump administration make things crystal clear.

Fiscal restraint was never an option.

It was shocking to see Scott Bessant, allegedly the only adult in the room, go live on television this weekend and express no interest in reducing spending. It felt like his entire economic plan just reversed out of nowhere. He was really the last man standing in the administration with a meaningful grasp of the bond market, but for whatever reason, he’s now fading into the background.

Another surprising moment came from the Bloomberg interview with Elon Musk, who seemed both frustrated and disappointed with the administration. When asked if he planned to spend as much during the midterms, he said no. Looking at Doge, we warned from the beginning that it might just be a gimmick to rally support around a massive spending bill. And that’s exactly what we got. If passed by Congress, this bill means more years of reckless spending.

Just weeks ago, one could at least argue that while spending was surging, tariffs were generating revenue. But now, the Trump administration appears to be backing off aggressive reciprocal tariffs, trying instead to de-escalate trade tensions. Clearly, Trump saw the polling damage and tossed water on the fire.

The bigger issue is this. The market is now trading as if the U.S. government cannot or should not issue more debt.