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Traders Trump Trump! Or the Bond Vigilantes Redux! In the game of chicken between Powell, Xi and the markets now Trump has blinked with all of them . Stock futures are rallying as he has now backed down on threatening to fire Powell; he has blinked with China begging Xi to start negotiations to de-escalate the destructive trade war; also Elon is abandoning dodgy dumb DOGE to take care of floundering Tesla. And investors forced Trump to back down via market discipline . As I presciently wrote in December (see link below), market discipline, Fed independence/discipline, good advisors (Bessent , Miran) and a thin majority in Congress would be four strong guardrails that would strongly constrain Trump’s worst instincts and bad policies. As Jim Carville famously said: "I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody." Indeed, the bond/market vigilantes are the most powerful folks in the world! Traders Trump Trump! Trump may control his party, Congress, the Supreme Court , social media (as Elon controls X and soon TikTok’s control will be passed from the CCP to some other MAGA buddy of Trump to manipulate the minds of the Gem Z). But he can’t control investors: the stock, credit, dollar and bond vigilantes! They are more powerful than Trump. God save the bond vigilantes! https://t.co/CHYijQCduH