Why is Trump doing this?

We’ve all heard President Trump tout tariffs as a tactic to bring back domestic manufacturing, exact revenge on trading partners with deficits that hurt the US, and as a point of leverage during negotiations.

But there’s another explanation for why Trump is so set on rolling out these tariffs, to the dismay of economists everywhere: He wants to bring down treasury yields. Yes, those boring old things.

Trump’s team is intent on lowering borrowing costs, for a number of reasons. Lower yields would cut the cost of refinancing the government’s massive pile of debt. It would also lower mortgage rates, giving Americans long locked out of the housing market a better chance to buy a home. More broadly, lowering the yield on the 10-year Treasury note is a back-door way to make borrowing cheaper for the government, businesses, and regular people.

The most obvious way to bring down the cost of borrowing is to lower interest rates. But the Fed has made it clear that the central bank is not capitulating to Trump’s demands, leaving the administration to find other methods to cut bond yields. These include increasing the supply of oil and cutting gas prices, cutting government spending by firing massive numbers of federal employees, or, perhaps, utilizing trade policy.

That brings us to one side effect of the tariff-induced panic that many have noticed: With investors fleeing the stock market and pouring money into bonds, yields sank. At the end of last week, 10-year yields fell to 3.9%, down from 4.2% on Wednesday, the day tariffs were announced.

But as the administration has discovered, keeping interest rates low is easier said than done.

Is this economic medicine—or poison?

While the White House has denied that the president is intentionally causing an economic slowdown, Trump himself reposted a video on Truth Social Friday that said explicitly, “Trump is crashing the stock market,” and specified “he’s doing it on purpose.”

Trump said something similar this weekend, telling reporters on Sunday that, “Sometimes you have to take medicine to fix something.”

And how is this economic realignment to lower borrowing costs going so far? The 10-year Treasury yield rose above 4% today.

So much for that medicinal intervention.—LB