The former president’s latest media tantrum is a microcosm of the market’s worst fear: volatility driven by reality denial. In a move that would make any corporate chairman blanch, Donald Trump walked out of an NBC interview yesterday after anchor Kristen Welker pressed him on his ‘rigged election’ claims. The optics were pure chaos, but the economic signals are more troubling.
For investors, this is not just a political sideshow. It is a reminder that fiscal stability relies on the rule of law and a shared acceptance of outcomes. When a major political figure rejects electoral legitimacy, the risk premium on US assets rises.
Gilt yields may be our domain, but contagion is a known risk. Capital flight towards safe havens like the yen or Swiss franc is already ticking up. The real question: does this behaviour spook the bond market?
The 10-year Treasury yield held steady, but the VIX is creeping higher. Market efficiency demands predictability. A former president who jettisons interviews mid-stream is the opposite of predictable.
The City of London will be watching the fallout, not because we care about the politics, but because uncertainty is the enemy of the bottom line. Trump’s theatrics are a distraction from the real fiscal story: unsustainable deficits and a Federal Reserve walking a tightrope. But a leader who cannot finish an interview is a leader who cannot negotiate a debt ceiling.
That should worry every bond trader in the Square Mile.
