Skip to content

What’s Going on in the Bond Market?

‘This sort of asset is no longer risk-free.’

Happy Thursday! Voting for the 2025 Webby Awards ends today—be sure to cast a vote for The Dispatch!

Quick Hits: Today’s Top Stories

  • El Salvador President Nayib Bukele plans to double the capacity of the country’s maximum-security prison—the Terrorism Confinement Center, or CECOT—the Wall Street Journal reported on Wednesday. Bukele reportedly informed Homeland Security Secretary Kristi Noem of his plans last month during her visit to the complex, which currently houses more than 250 deportees from the United States. President Donald Trump has also alluded to the possibility of detaining American citizens convicted of violent crimes in the Central American country. During an Oval Office meeting on Monday, Trump told Bukele that he will “have to build five more places” to house them, because the current space is “not big enough.”
  • Cody Balmer—the 38-year-old man charged with attempted murder for an arson attack on the home of Pennsylvania Gov. Josh Shapiro while his family was visiting for Passover—told police he opposed Shapiro’s supposed “plans for what he wants to do to the Palestinian people,” according to a search warrant released on Wednesday. About 50 minutes after police were notified of the fire at the Democratic governor’s home on Sunday morning, Balmer called a 911 dispatcher and said he wanted to “stop having my friends killed” and that “our people have been put through too much by that monster.” Balmer’s mother told CBS News earlier this week that he was “mentally ill” and had recently stopped taking his medication. 
  • U.S. District Court Judge James Boasberg threatened on Wednesday to begin contempt proceedings against the Trump administration for what he called its “willful disregard” of his order last month prohibiting the government from deporting alleged Venezuelan gang members to El Salvador under the Alien Enemies Act. “The court does not reach such conclusions lightly or hastily,” he wrote in the 46-page ruling. “Indeed, it has given defendants ample opportunity to explain their actions. None of their responses has been satisfactory.” The Justice Department, under the umbrella of the executive branch, is generally responsible for prosecuting contempt of federal court. If the department declines to prosecute the case, Boasberg said the court would appoint another attorney to do so. 
  • The Justice Department on Tuesday sued Maine’s Department of Education over its policy allowing transgender individuals to participate in women’s school sports. The Trump administration argued in its lawsuit that Maine’s policy ran afoul of Title IX, which prohibits sex-based discrimination for entities receiving federal funding. In February, Trump signed an executive order requiring schools to bar transgender athletes from competing in women’s sports or face the withdrawal of their federal funding. Maine is “openly and defiantly flouting federal anti-discrimination law by enforcing policies that require girls to compete against boys in athletic competitions designated exclusively for girls,” the administration’s lawsuit alleged. 
  • The Pentagon on Wednesday placed a third official—Colin Carroll, the chief of staff to Deputy Defense Secretary Stephen Feinberg—on leave amid an investigation into leaks of sensitive information from the department. His suspension came a day after two other political appointees, including a top adviser to Defense Secretary Pete Hegseth, were reportedly escorted from the building. An unnamed defense official told Politico the leaked information concerned military operation strategies for the Panama Canal, a U.S. aircraft carrier’s movement to the Red Sea, and Elon Musk’s planned briefing on China last month. 
  • The Internal Revenue Service is considering whether to rescind Harvard University’s tax-exempt status, multiple outlets reported Wednesday. The deliberations followed Harvard’s Monday announcement that it would not comply with the Trump administration’s demands that it make significant reforms, which the administration says are intended to address antisemitism on campus. On Monday, the White House announced plans to freeze more than $2 billion in multi-year grants to the Ivy League university.
US Treasury Department Building
The U.S. Treasury Department building in Washington, D.C.(Tom Brenner/Bloomberg/Getty Images)

It might be easy to assume that when President Donald Trump partially backtracked on his sweeping tariffs rollout earlier this month by announcing a 90-day pause on most of his “reciprocal” duties, he had been spooked by the precipitous decline in the stock market. But Trump was reportedly persuaded—at least in part—to retreat from his initial plan by the large-scale sell-off of another financial asset: U.S. Treasury bonds. 

In the week after “Liberation Day,”  the Treasury market experienced some of its most volatile trading days in decades, rivaled only by the “dash for cash” at the start of the COVID pandemic in 2020. On Tuesday, April 1—the day before Trump’s “Liberation Day” announcement of sweeping tariffs—Treasury bonds traded with a yield of 4.17 percent. By the close of April 4, they were down to 4.01 percent, then reached as high as 4.48 percent on April 11 (after Trump’s pause).

These were ominous warning signs: While short-term chaos may have been due to relatively specific market factors, they may also signal that investors are reconsidering the U.S. Treasury’s historic place as ...


As a non-paying reader, you are receiving a truncated version of The Morning Dispatch. You can read our 1,267-word item on volatility in the bond market in the members-only version of TMD.

Today’s Must-Read

Commentators have warned that if President Donald Trump goes too far in exerting his control, then it will be easier for the next Democrat in the White House to justify similar actions, creating policies Republicans no doubt will disapprove of. Still, with fewer than 100 hundred days having passed since Trump’s second term began, the messaging campaign employed by Democrats against the president’s actions centers on promising a return to order, not tit-for-tat retribution. Sen. Chris Murphy of Connecticut argued that Trump’s often chaotic concentration of power will help his party retake control of the federal government.

Toeing the Company Line

California Governor Newsom Announces Lawsuit Challenging Trump Tariff Authority

Precedent Trump

Jonah Goldberg /

Trump’s tactics could very easily be copied by Democrats.

mainstwallst2

Actually, Wall Street (Kinda) Is Main Street

Scott Lincicome /

And tariffs are harming both.

US-ECONOMY-MARKET-STOCKS

Democrats Call for Insider Trading Probes Tied to Tariff Pause Announcement

Alex Demas /

Current law requires legislators and officials to publicly disclose trades.

Paper cutout, family and hands of people together for security, adoption or foster care. Zoom of parents and children figure in palm for love, art or support for health insurance, charity or wellness

These Aren’t the Family Values I Remember

Abby M. McCloskey /

Why fertility is the wrong goal post for family policy.

Advisory Opinions site HQ

The Collision Is Coming

Sarah Isgur & David French /

'It's a real race to the bottom.'

REMNANT SITE THUMB (2)

Uniting the Sane

Jonah Goldberg /

We’re all trying to find the guy who did this …

Worth Your Time

  • Criminals are quickly adopting cutting-edge technology to entrap victims and carry out attacks. Can law enforcement keep up? In City Journal, Laura Huey, Lorna Ferguson, and Cole Heffren proposed solutions to the growing technological deficit. “On New Year’s morning, American citizens awoke to news of another mass-casualty terror attack. Using a rented a pick-up truck, a man plowed through revellers on New Orleans’s Bourbon Street, killing 14 and wounding at least 57 others. This was no crude act of vehicular terrorism: the attacker employed smart glasses to reconnoiter the area before striking. He had wired his vehicle with improvised explosive devices (IEDs), and strategically planted additional bombs across the neighborhood. The materials used were not black-market contraband but commercially available technology, repurposed for destruction,” they wrote. “To counteract malevolent innovation, policing must become anticipatory rather than reactionary. Foresight exercises—simulating future crime trends—should become standard practice. Law enforcement must forge closer partnerships with tech firms, to mitigate emerging threats; and with researchers, to predict, forecast, and identify practices and policies to address them. Legislative bodies must consider proactive regulation of technologies prone to misuse. And crucially, police forces must accelerate their decision-making processes.”

Presented Without Comment

CNBC: [Federal Reserve Chairman Jerome] Powell Indicates Tariffs Could Pose A Challenge For The Fed Between Controlling Inflation And Boosting Growth

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said in prepared remarks before the Economic Club of Chicago. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”

In a question-and-answer session after his speech, Powell said tariffs are “likely to move us further away from our goals ... probably for the balance of this year.”

Also Presented Without Comment

Politico: Vladimir Putin Lauds Elon Musk as Rare Pioneer

In the Zeitgeist

Billy update! After being rescued from southern Gaza by an Israeli reservist last week, the Cavalier King Charles spaniel who was abducted from Nahal Oz during Hamas’ October 7, 2023, attack was reunited with her family yesterday.

Charlotte Lawson is the editor of The Morning Dispatch, currently based in southern Florida. Prior to joining the company in 2020, she studied history and global security at the University of Virginia. When Charlotte is not keeping up with foreign policy and world affairs, she is probably trying to hone her photography skills.
James P. Sutton is a Morning Dispatch Reporter, based in Washington D.C. Prior to joining the company in 2024, he most recently graduated from University of Oxford with a Master's degree in history. He has also taught high school history in suburban Philadelphia, and interned at National Review and the Foreign Policy Research Institute. When not writing for The Morning Dispatch, he is probably playing racquet sports, reading a history book, or rooting for Bay Area sports teams.
Peter Gattuso is a fact check reporter for The Dispatch, based in Washington, D.C. Prior to joining the company in 2024, he interned at The Dispatch, National Review, the Cato Institute, and the Competitive Enterprise Institute. When Peter is not fact-checking, he is probably watching baseball, listening to music on vinyl records, or discussing the Jones Act.

Newsletter selected

Click sign up to start receiving your newsletters.

Please note that we at The Dispatch hold ourselves, our work, and our commenters to a higher standard than other places on the internet. We welcome comments that foster genuine debate or discussion—including comments critical of us or our work—but responses that include ad hominem attacks on fellow Dispatch members or are intended to stoke fear and anger may be moderated.

With your membership, you only have the ability to comment on The Morning Dispatch articles. Consider upgrading to join the conversation everywhere.

Comments are closed.

Related Posts