I’m an Investing Expert: Here’s How Trump Could Shake Up Your Bonds in 2026

Core Viewpoint - The current U.S. Treasury bond market is experiencing increased volatility due to President Trump's policies, which could significantly impact bond investments and returns for investors. Group 1: Tariff Volatility - Trump's tariff strategy has created a turbulent environment for bonds, particularly long-term Treasuries, leading to market shockwaves [3] - Recent tariff threats against EU allies and geopolitical maneuvers have triggered a sell-off of U.S. bonds, causing a significant spike in the 30-year Treasury yield [4] - Continued escalation of tariff tensions may lead to further increases in the 30-year yield, counteracting Trump's goals of lowering interest rates and borrowing costs [4] Group 2: Mortgage-Backed Security Purchases - Trump may utilize quantitative easing through mortgage-backed security (MBS) purchases to influence bond market rates without Federal Reserve cooperation [5][6] - If initial MBS purchases are successful, further rounds may be expected to coerce rates down [6] Group 3: Growing Deficits - Trump's tax and spending policies are projected to add approximately $4.1 trillion to the national debt over the next decade, necessitating higher yields to attract bond investors [7] - The rising deficit will require the U.S. government to offer more attractive rates to pull investors away from equity markets [7]