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Market Discipline & Tech Trump Trump’s Temper Tantrums Too! On April 2nd 2025 I argued that market discipline would force Trump to chicken out - go from TALO to TACO - and back down from very high tariffs (announced 30% effective rate). Indeed, two weeks later S&P was down 15%, NASDAQ down 20%, bond yields went up 80bps, high yield spread up 150bps and the $ started to free fall. Then the Don blinked/chicken out and today average tariffs are 14% and falling further. Now he tried to play hardball on Greenland and bond yields are starting to rise (when the average American is already shafted by high mortgage rates), the dollar is staring to fall (causing more inflation over time) and stock markets are wobbling. Why didn’t the smart Bessent tell him all that in advance instead of threatening the Europeans and triggering a global bond rout that is pushing US bond yields to levels that will trigger more ATI (Activist Treasury Issuance that me and Miran criticized Yellen for in 2024) ? Bessent has already doubled and tripled down on ATI by widening that policy and even threatening outright bond buybacks. They make fun of Mamdani for his dumb “rent freeze” proposals but MBS $200bn purchases by GSE, ATI, freezing credit card rates at 10%, manipulating mortgage markets are Mamdani-style price controls to the power of 4! This is state capitalism to the power of two! We are becoming like China rather than China becoming like us! Luckily for the US, market discipline and Tech Trump Trump’s Temper Tantrums Too!! Trump controls Congress, his party, SCOTUS, even social media (Twitter via EM) but he cannot control markets. As Clinton learned when I was in the WH (CEA) and Jim Carville confirmed the Bond (and Market) Vigilantes are the most powerful people in the world, even more powerful than POTUS!