The bond market has made a US president drop his tax cut, an Italian prime minister and a British one resign, and a trade war pause. This week it made the Fed raise rates.

Name: The bond market has made a US president drop his tax cut, an Italian prime minister and a British one resign, and a trade war pause. This week it made the Fed raise rates.
Creator: US Treasury, European Central Bank, Bank of England (2026)
License: https://creativecommons.org/licenses/by/4.0/

Clinton 1994
5.2% to 8.1%
balanced the budget
Berlusconi 2011
4.8% to 7.1%
resigned
Truss 2022
3.6% to 4.7%
gone in 49 days
Trump 2025
4.0% to 4.5%
paused the tariffs
Warsh 2026
4.0% to 5.0%
raised rates

How far each government's 10-year borrowing cost rose, from the low just before the episode to its peak. A government bond is a loan to the state. Its yield is the interest investors demand, and they set it, not ministers or central banks.

Why this is happening

Italy, 2011: investors pushed the 10-year yield from 4.8% to 7.25%, the level that had forced Greece, Ireland and Portugal into bailouts. Silvio Berlusconi lost his majority and resigned three days after it passed 7%.
Britain, 2022: Liz Truss announced £45bn of unfunded tax cuts on a Friday. By Tuesday the 10-year gilt yield was up almost a point at 4.5% and the Bank of England had to rescue pension funds. She was gone in 49 days.
America: a week into Trump's tariffs in April 2025 the 10-year yield had jumped from 4.0% to 4.5%. He paused them, saying people "were getting a little queasy". This year it climbed from 4.0% to 5.0% while the Fed held. On Wednesday the Fed raised rates.

The take

Bill Clinton dropped his promised tax cut in 1993 to keep bond investors calm. When they sold anyway in 1994 he set out to balance the budget. His strategist James Carville: "I used to think that if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody." Trump's Treasury Secretary, Scott Bessent, in June: the bond market "has taken out more governments than howitzers".

Source: US Treasury, European Central Bank, Bank of England (2026)

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MacroSnaps (2026). "The bond market has made a US president drop his tax cut, an Italian prime minister and a British one resign, and a trade war pause. This week it made the Fed raise rates." Edition No. 69, 18 September 2026. https://macrosnaps.app/c/bond-market-bully

Permanent link: https://macrosnaps.app/c/bond-market-bully

The underlying data

MacroSnaps drew this chart. The numbers in it are published by US Treasury, European Central Bank, Bank of England (2026). Their terms, not ours, govern the underlying data.