Former President Donald Trump often warns about financial calamities that could ensue if rivals are elected. His running mate says there could be a problem if he is elected.

Speaking to the former Fox News personality Tucker Carlson, Sen. J.D. Vance, the Ohio Republican and the party’s vice presidential nominee, said one of his big worries is the bond market.

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“The thing I really worry about on bond markets is, OK, we have $1.6 trillion to $2 trillion in debt every single year in this country getting added to the national debt. And the only thing that makes that serviceable is that interest rates are still pretty low,” said Vance.

“If interest rates go to 8%, and you’re spending way more to service the debt than you are on actual goods, services and infrastructure for your country, like that can become a huge spiral that could take down the finances of this country,” he said.

Vance said Wall Street could deliberately try to sink a Trump presidency.

“I really worry about the bond markets. Do the international investors, the people who are getting rich off globalization, the people who have gotten rich from shipping our manufacturing base to China, the people who have gotten rich from a lot of wars — do they try to take down the Trump presidency by spiking bond rates?” Vance wondered aloud to Carlson.

He said a Treasury secretary would have to be able to manage through a crisis in real time.

He then gave a comparison to Liz Truss’s ill-fated premiership in the U.K. “It would be devastating to the president if you had this bond-market death spiral,” he said.

That’s a lot to unpack. On the numbers, Vance is roughly correct. Bond yields are lower than where Vance recollects — the 10-year BX:TMUBMUSD10Y has dropped to 3.76% — but the fiscal-year deficit will be around $2 trillion (in part, it should be noted, due to the tax cuts Trump signed into law during his first presidency).

Net interest on the public debt through the first 11 months of the fiscal year has been $870 billion — more than any program besides Social Security and Medicare, and even more than defense spending.

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Famed investor Stanley Druckenmiller — no fan of the current U.S. administration under President Joe Biden — has warned that inflation could surge, and bond values suffer, in a second Trump administration. He said Trump’s attacks on the independence of the Fed could lead to an “Arthur Burns model, times two,” a reference to the Fed chair under Nixon.

As for the comparison to Truss, whose premiership was famously outlasted by a head of lettuce: In September 2022, Truss’s chancellor, Kwasi Kwarteng, outlined to Parliament what was called a minibudget.

In it was the first estimate of bond-market issuance that would be needed to fund the government’s intervention into the energy market, and it also included unexpected tax cuts for the wealthy. The pound GBPUSD plunged in the immediate aftermath — on a Friday — and then nosedived the ensuing Monday, in part due to thin trading conditions in Japan where there was a market holiday.

The Bank of England intervened because many pension funds, at the urging of the government’s pension regulator, had leveraged investments in U.K. government bonds, which plunged in value. But the central bank set a date for unwinding its support, and the Truss government ahead of the deadline backtracked on most of its fiscal plans.

Truss resigned the briefest premiership in British history.

Truss has said that a Bank of England report showing the pension-fund troubles was the main source of the rise in bond yields demonstrates the crisis was the central bank’s fault.

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