Rep. David Schweikert (R-Ariz.) remarked on Wednesday that rising U.S. government bond rates have made the government more vulnerable to pressures from the bond market, which he believes could effectively dictate the country’s direction.
“Honestly, we’re at a point where the global debt market has a significant influence on running the country. The stock market? It’s not looking that strong,” he stated.
He emphasized, “It’s really about the bond and debt markets.”
Recently, several business leaders have shared similar worries, highlighting that the government’s fiscal deficit and increasing debt are shaking investor confidence in the bond market.
“It’s a serious issue, and it’s likely that one day… the bond market will face challenges. Is that in six months or six years? Who knows?” said Jamie Dimon during a recent interview on Fox Business Network.
Dimon went on to stress the importance of focusing on economic growth, sensible deregulation, and reform as key strategies for improvement. “That’s really the best approach,” he remarked.
Since early April, the bond market has shown notable fluctuations, particularly after President Trump’s implementation of tariffs affecting various nations. The passage of what Trump referred to as his “big, beautiful bill” has also contributed to turmoil in the financial markets, with anticipated debt increases in the trillions.
Bond traders are wary of how this pressure could push U.S. debt towards higher interest rates. Trump himself linked the upheaval in the bond market to his decision to roll back some tariffs in April.
Last week, the 30-year Treasury yield peaked at 5.1% but was trading around 4.9% by Wednesday.
Schweikert identified demographics as a major factor driving the nation’s debt levels.
The extensive legislative package from Trump includes an extension of the 2017 tax cuts, which could potentially add $2.4 trillion to the U.S. deficit over the next ten years, as estimated by the Congressional Budget Office.
Although Schweikert, referred to as a Finance Hawk, supported the legislation, he voiced concerns about its long-term implications.
“I’m quite worried that if interest rates stay high or continue to rise, the various profits we’re making, like those from investments in research and development, might be overshadowed by these rising costs,” said the Arizona Republican.
“Look, there’s a constant effort to keep everyone satisfied right now,” Schweikert acknowledged. “But you must really grasp how much borrowing is going on in the bond market and consider what’s happening globally—Germany reentering the debt market, Japan’s situation, and China’s own debt troubles.”
