The bond market thinks as much of Trump’s China visit as I do. 
Bond yields are ripping higher this morning along with the price of oil as Trump heads home from China.
If Trump’s visit to China was supposed to have accomplished something, the bond market doesn’t see it and neither do I.
Trump and Xi Want to Stabilize U.S.-China Ties. Now Comes the Hard Part.
The Wall Street Journal reports Trump and Xi Want to Stabilize U.S.-China Ties. Now Comes the Hard Part.
At the end of President Trump’s state visit to China on Friday, with Air Force One lifting off through the haze at Beijing’s airport, both sides hailed a reset in relations—though each has a starkly different idea of what that means.
For Trump, it is about opening China’s market to American business and reciprocal trade, reviving a U.S. policy he scrapped in his first presidency, when he had adopted a more hawkish attitude toward Beijing.
Chinese leader Xi Jinping, meanwhile, wants “strategic stability”—a predictable relationship in which Washington doesn’t impede Beijing’s economic and geopolitical rise.
The shared desire for stable relations is a change after years of mutual antagonism.
“‘Strategic stability’ from strategic rivalry is a major shift,” said Henry Wang, founder and president of the Beijing-based Center for China and Globalization. “We are moving to a new normal. This summit was an inflection point after a tough relationship that began with the start of Trump.”
Under the surface, however, there remains an intense rivalry that holds the potential to disrupt the world stage, despite the bonhomie of the two-day visit.
China is boldly pressing its claims on Taiwan, a self-governing island that the U.S. is committed to supplying with arms for its self-defense. China’s military is becoming increasingly aggressive in the Western Pacific, rattling U.S. allies and posing a serious military and geopolitical challenge to Washington. And China’s support of Iran—an issue Trump raised during his visit—could undermine U.S. efforts to force the regime to give up its nuclear program and halt its aggression in the Middle East.
Such disagreements didn’t cool Trump’s show of admiration for a man he repeatedly called his friend. Trump marveled at his reception, from a grand welcome ceremony to a Day Two stroll through the Chinese leadership compound in Beijing.
Throughout the visit, Xi sought to present China as a global power that is quickly closing the gap with the U.S. despite what it sees as efforts by multiple U.S. administrations to contain its rise.
Trump said he was “very impressed.”
Still, Trump left Beijing without offering details of the trade agreements he touted, namely China’s purchases of soybeans and agricultural products.
His one detailed announcement, that China would buy 200 Boeing aircraft—fewer than the expected 500—led the company’s stock to fall nearly 4%. By the time the U.S. delegation departed, there was no official rundown of deliverables from the meetings.
China wants concessions from the U.S. on Taiwan, including small but crucial rhetorical shifts such as moving from not supporting Taiwanese independence to publicly opposing it, while also limiting weapon sales to the democratic self-governed island.
Despite Xi’s statement this week, Trump remained silent on the topic of Taiwan, while Secretary of State Marco Rubio said U.S. policy toward Taiwan was unchanged.
Trump came to Beijing looking for China to pressure Iran, which largely relies on China for its economic survival, to give in to U.S. demands and agree to an end to the conflict.
During the summit, Trump suggested he and Xi saw eye-to-eye on Iran, noting Beijing agreed that ship traffic through the Strait of Hormuz should be free and Tehran should never get a nuclear weapon.
But China’s Foreign Ministry issued a mid-summit statement with the blunt message that the war should never have been started in the first place.
I Do Have Progress to Report
If that’s not amazing progress, what is?
Still not convinced? Well, look at this.
China Has a Ballroom
New Landmark Declared
Amazing Spin Job Here
Truth Social: When President Xi very elegantly referred to the United States as perhaps being a declining nation, he was referring to the tremendous damage we suffered during the four years of Sleepy Joe Biden and the Biden Administration, and on that score, he was 100% correct. Our Country suffered immeasurably with open borders, high taxes, transgender for everybody, men in women’s sports, DEI, horrible trade deals, rampant crime, and so much more!
President Xi was not referring to the incredible rise that the United States has displayed to the world during the 16 spectacular months of the Trump Administration, which includes all-time high stock markets and 401K’s, military victory and thriving relationship in Venezuela, the military decimation of Iran (to be continued!) — Strongest military on earth by far, economic powerhouse again, with a record 18 trillion dollars being invested into the United States by others, best U.S. job market in history, with more people working in the United States right now than ever before, ending country destroying DEI, and so many other things that it would be impossible to readily list. In fact, President Xi congratulated me on so many tremendous successes in such a short period of time.
Two years ago, we were, in fact, a Nation in decline. On that, I fully agree with President Xi! But now, the United States is the hottest Nation anywhere in the world, and hopefully our relationship with China will be stronger and better than ever before!
China Buying US Farmland Is Good Now
Strategic Oil Reserve
Bonds are crashing, the price oil is surging, and reserves dwindling.
Checking in on the UK
Shocking Sequence of Events
This is all quite shocking. One might have expected a better market reaction from those amazing Tik-Tok stats. Go figure.
Oh well, it’s Friday.
That means it’s time for another “deal is at hand” announcement. Tack on some great news about the ballroom, and I am sure everything will be fixed by Monday.
In the Real World
May 12, 2026: CPI Hotter than Expected, Highest in Three Years, a Genuine Disaster
Inflation in April was another scorcher. Here are some month-over-month and year-over-year charts.
May 12, 2026: Real Hourly Earnings Decline Again, No Growth Since Trump Took Office
If it feels like you are not getting ahead, it’s because you aren’t. Six charts.
May 13, 2026: Two Reasons the CPI Report Will Give the Fed Severe Headaches
There are two very troubling aspects of the latest BLS CPI report. Did you spot them?
May 13, 2026: Two Reasons the PPI Report Will Give the Fed Severe Headaches
This morning, I listed two big headaches in the CPI report. Now, it’s the PPI’s turn.
The Collapse continues ….
Would it not have been more appropriate to make the statue from solid brass?
Beam me back up, Scotty
3 months after Greenspan succeeded Volcker, he had to deal with a historic stock market crash.
It doesn’t even look like Warsh will have three months – and he will be dealing with both a stock and bond market crash.
It is possible that Trump is waiting to get back to the United States, so he can place all of his trades, before making big China announcements of “deals”.
If further proof were needed that Trump is a monster:
https://finance.yahoo.com/sectors/energy/articles/trump-projects-confidence-iran-war-065248216.html
I see Trump more of a symptom than the problem. The problem started decades ago, and we have finally come to the point that we can’t both put a bandaid over it nor ignore it.
I said it twice now, and I’ll say it again: it took both Republicans and Democrats to bring us to this point of failure. And I personally believe there isn’t a fix for this but for it to burn to ash. Then and only then can the rebuilding start.
It’s how empire collapse and how the world (including those within the empire) heal from its corruption, tyranny, and oppressiveness.
Never did I say that if only Trump were gone that everything would be ice cream and liver treats.
Most political and business leaders are glorified sociopaths. The difference is that Trump says the quiet part out loud.
I thought Biden was a symptom, and perhaps Trump is both symptom and then so bad that he counts as a problem by itself on top of that
Wow, Sean Hannity aged 20 years outside the soft FoxNEWS lights didn’t he?
Orange Jesus is just walking blind into the next steps of hegemonic demolition for the US
The Chinese must be laughing so hard and saying “it can’t be this easy!”
And the bond market is finally giving up on the fantasy that we somehow will straighten things out
He’s a menace to humanity
I knew by last night the Chinese summit was just words, but i needed to wait 12hrs for confirmation.
https://finance.yahoo.com/economy/policy/articles/china-pulls-export-licenses-us-062510754.html
“China pulls export licenses for US beef plants shortly after renewing them”
LoL! Just as they did during Trump 1.0 China said they buy from American farmers but never did and that led to sanctions, tariffs and a trade war with China. Though it’s much worse now.
This is why deals are useless if based on words.
https://www.bbc.com/news/articles/ce8p61v7l68o
“[Trump] added: ‘On Taiwan, [Xi] does not want to see a fight for independence because that would be a very strong confrontation, and I heard him out… He continued: ‘That question was asked to me today by President Xi… He asked me if I’d defend them. I said, ‘I don’t talk about that’.”
I’m sure you didn’t want to talk about Mr. Trump while IN China, least you he put in a Chinese jail or worse.
https://www.msn.com/en-us/news/world/trump-says-he-doesn-t-need-any-favors-from-china-on-hormuz-opening-hints-at-little-cleanup-work-in-iran/ar-AA23hkPC
“When questioned if Chinese President Xi Jinping had pledged to pressure Iran to reopen the Straight of Hormuz, Trump stated that he wasn’t seeking any assistance.
‘I’m not asking for any favors because when you ask for favors, you have to do favors in return. We don’t need favors,’ said the President”
There ya have it China didn’t give in and wasn’t able to make Trump understand he has no cards. And just for kicks:
https://truthsocial.com/@realDonaldTrump/116575104401917058
“… President Xi very elegantly referred to the United States as perhaps being a declining nation…”
LoL! You don’t say Mr. Trump unfortunately though you thought Xi was talking about the Biden years when in fact he’s talking about the America of now.
Given this I think it’s safe to say Trump is likely to attack Iran again. My guess is June or July (maybe even this month given Trump’s mood).
The future isn’t gonna be pretty (decades now), and I hope y’all have a plan b.
China will always swoop in and buy Ag commodities at bargain basement prices.
Inflation projected to hit 6% in second quarter!
https://www.cnbc.com/2026/05/15/inflation-rate-projected-to-hit-6percent-in-the-second-quarter-top-economic-forecasters-say.html
But you ain’t seen nothin’ yet cuz….
Do worry, Trump will find a way to make things even worse.™
Stunning…30 year is up 100 basis points in a day.
The sleeping bond vigilante bear has finally woken up from hibernation.
July Brent $109 and climbing. Where’s your savior now?
Search Assist
A basis point is one hundredth of a percent, or 0.01%. This means that 100 basis points equal 1%
Bond market is on fire.
Trump is playing guitar.
Who hasn’t been burned by Trump’s 180s. All you need to do is throw the j-erk a parade and he melts
That statue: Fake gold, fake president. A president in name only. A pino.
Here he is coseying up to the Chinese, talking trade etc., meanwhile his administration is warning Canada about making deals with the big bad Chinese communists.
The only reason the US cares about Canada talking trade with China is because it weakens their position in negotiating a trade deal with Canada and China.
The silence on Iran is deafening! Wasn’t that the purpose of the visit? So is there a plan!
China looks strong and the US looks weak.
All we got was: China agrees the straight should be open. Gee ya think!
The optimistic way to frame this:
“Stock market on verge of melt up”
There has been many a doomsday call since QE started and S&P500 is now over 10x since then and investing in it is the only way to have kept up with real inflation. When looking at returns after taxes, bonds didn’t do it and nor did gold. I am starting to think the correct way to invest is 100% in S&P500, 0% in bonds.
Once they restart QE to support the bond market, stocks will skyrocket. There will be a violent move upward in both stocks and bonds in the coming days. Bessent already said he’s OK with a few high inflation prints. That means we are headed to double digit inflation as “we grow ourselves” out of this.
Probably correct.
Is it prudent? No.
Do Trump or Bessant care? No.
Is it going to roger savers at the expense of speculators? Yes.
Will it be a transfer of wealth from future generations to the present? Yes.
#MAGA
Look at the USDollar too. It’s making some sharp moves higher after being in a 3.5 year bear market. I’m thinking the action in US bonds and USD indicate another country is having a currency crisis.
Believe it or not the dollar will go up, rates (market forces not the fed) will go up, metals will go up, and for a time so will (some) stocks all at the same time.
When you see that it will be moments before something big blows.
Six whole basis points? Oh my knees are shaking. That’s sarcasm by the way.
i do concede this is likely not a good time to buy long term bonds. But then at my age long term bonds are pointless idea anyway.
One man’s trash is another man’s treasure. I’m buy-writing the hell out of TLT. The higher the yield the lower it drops. Sell calls to raise returns and lower cost average then sit back and wait for total chaos and fed cuts somewhere down the line and live happily ever after.
Buy yeah, you need time to make it work, not good for geezers.
This is certainly what the big bank traders are doing
I keep hearing more preposterous reasons why stocks will keep going up, a sure dign the top is near
“transgender for everybody, men in women’s sports, DEI”
It’s amazing how like .001% of the population can completely crush conservative sensibilities. We need safe spaces for our evangelical brothers and sisters!
We should start by arresting Epstein’s friends.
The matter is simple. The US is stuck with 19th century – gunboat diplomacy – while China is racing into 21st century thinking. The US is a PetroState while China is becoming an Electrostate. The US is structured for short term, opportunistic thinking while China focuses on 5 year plans. China has quietly pointed out that top US leaders would not even be close to qualifying for positions of authority there, lacking experience and (often) degrees in engineering. “Anyone can be elected President” gets to be a somewhat frightening truism.
The US should give up on Taiwan and make a deal. They aren’t making babies sufficient to avoid eventual extinction, thus, they don’t care about their long term future. Weapons, yes – future citizens, taxpayers and soldiers, no. Why waste time with them? I don’t see anyone pointing out this strategic failure.
Interesting that during covid we had monetary problems and the Fed pressing for more lockdowns. Now it’s all hantravirus talk.
Its 2026, ffs. NOBODY needs a damn ballroom.
As I mentioned above, that was the best thing China showed to Trump.
Wouldn’t you like to see the finishing of the ballroom occupy his remaining time in office? Would save the country all the trouble of impeachment trials.
We would need to hire a few thousand people to stand around it and applaud 24/7 to hold his attention, but it would be cheap relative to the alternative.
That statue will end up getting treated like Saddams.
Thinking same
It will have a post up it’s ass and be paraded around like a popsicle.
So kind of like every LGBT pride parade except post instead of rainbow dildo….checks out.
It’s ok, you can come out of that closet. We’re all friends here.
As soon as I saw the picture I instinctively imagined ropes pulling it over lol
The phrase I read from Chinese sources was “constructive strategic stability.”
….First, the very language of “strategic stability” carries an implicit suggestion that U.S.-China relations should be managed on the basis of a “two equal major powers” model, rather than within a hierarchical order dominated by Washington. In a certain sense, this also reflects China’s growing confidence in dealing with the United States.
Second, the term “strategic stability” is more familiar to the American strategic community and therefore easier for them to accept. However, the deliberate addition of “constructive” signals that this is not meant to be a passive form of stability in which the two sides merely probe each other’s red lines. Rather, it implies that Beijing wants to cooperate where possible and that the two sides should actively cooperate rather than settle for passive crisis management….
Basically, China says the China and the US are the big boys in the room.
However, the question is brought to the front as a choice for the world’s nations
Which country can be described as “constructive”, which country is “strategic” in it’s planning, and which country can provide the “stability” the world needs
It’s not that subtle
so literally nothing got done practically, just a giant waste of money and further demonstration how fast we’re falling.
Lil’ Trumpstien got made to feel important, and that’s all that matters. The Chinese get it.
Quite likely the most important thing was showing Trump their ballroom so that he could use that to get his own ballroom. China would like to see the construction of the ballroom occupy his time for the next 2+ years in office.
Xi granted an audience to the President to tell him to start acting like an adult.
Not sure if it worked.
We may be experiencing the inflection point where the fed can no longer meaningfully impact interest rates by overriding natural market forces. I do not expect interest rates to come down unless congress gets its poop in a group. For me that is the single biggest issue as it matters not about any other issue if the country has failed via fiscal and monetary mismanagement.
The fed never over rode market forces. The Fed in 99% of the rate changes decisions FOLLOWED bond market movements. Only the past 3 years has the Fed tried to force yields lower and failed.
I have a little different view about the last 55 years of increasing debt facilitated by the fed holding rates down to facilitate congress running the debt sky high because there were foreign buyers forced to receive the lower rates as US debt was the only investment of size with the required safety, Now the safety component is gone. It’s been gone for a long time, just being realized in mass now. The fed now being forced to exercise being the buyer of last resort for US debt on an ever-increasing volume basis seriously reduces their efficacy.
Had interest rates been determined in a free market void of Federal Reserve interference, there would be no “reset” required that is about to be thrust upon us as the federal government would never been able to afford the debt service cost to get to the point we are at today.
I didn’t see any mention of the fiddle that Xi gave to Trump. Oh well, we will see Trump playing the fiddle quite soon.
The smallest violin…to go along with his “small hat”
OMG. This is such an amazing capitulation by Trump. China appears to win on every front.
Trump now wants to go back to the relationship we had with China that existed BEFORE his first term. After 9 years of trying to stifle trade with China, we now want to expand it again. Will the MAGA crowd now start wearing Make China Great Again hats because their cult messiah say it’s okay now?
Politically he is giving in on Taiwan. And we will have to see what happens with China “helping us” to open the strait that we managed to close.
I couldn’t help but laugh when Trump said that China is willing to buy US oil and US beef. This is brilliant on China’s part. We are already suffering from high beef prices and our beef cattle herd continues to dwindle (mostly due to record drought). Selling beef to China will only pressure US beef prices higher.
Same with oil. Tankers from China coming to “Texas, Louisiana, and Alaska” will only help to accelerate our dwindling reserves (and SPR) and raise prices here. We will fill China’s SPR by draining ours. And it indicates that Trump is not considering export controls yet on US oil and refined products. Oil prices should rise in response.
Xi merely mentions the Thucydides Trap and Trump folds like a pup tent. Taiwan fell this week. Trump’s one card is translating Xi’s words into his personal and delusional misinterpretation to salve his damaged ego.
Trump did not know what Xi was talking about when he mentioned Thucydides.
Xi knew he wouldn’t know what this was.
The world’s dumbest man but at least we can all profit from stupidity.
Confucius meets Forrest Gump.
Are you still favoring Canadian companies over American, or would this deal with China put CVX and XOM in a better position? With reserves running out, seems like a good time to load up.
Yes. I’m about 80% Canadian oil stocks vs 20% US. Longer life reserves in Canada and lower breakeven costs.
No guarantees though. If Trump puts export controls on US oil and refined products, both US and Canadian oil stocks tumble.
Same goes for windfall profits taxes put on by either government.
And when the strait finally opens, things will tumble for a few days before recovering.
It’s why I’m holding around 50% cash right now and actively trading 20% of my portfolio.
Thank you!
You any everyone else
of course MAGA will now love China same way they did a 180 on Russia.
we were never at war with eastasia
little people problems are not important
He yearns for the golden age of Obama and Biden.
Marco only got to go because they changed his name to go around his ban. The name they gave him was the character for “stupid”
Trump Crash One: 19 Feb 2025 to 7April 2025(Tariff Initiation)); Trump Crash Two: 25 Feb 2026 to 30 Mar 2026(Iran War Initiation) Trump Crash Three:14 May to 27 May 2026 (Inflection Point for Critical Global Oil Shortage; Inflationary Bond Squeeze)
Probably right on this one
There are unusual option plays on TLT into 2027, large expectations of either massive jump in yields or outright collapse in yields. Bond king Gundlach has been warning of debt restructuring. Recommends gold, real estate, commodities and foreign stocks.
https://finance.yahoo.com/economy/policy/articles/gundlach-takes-longshot-bet-case-023828888.html
Bond auctions next week, 20 year on the 20th and 10 year TIPS on 21st.
https://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf
Smoke ’em if you got em!
Do worry, Trump will find a way to make things even worse.™
The Bond market knows ‘Winning’ when it sees it.
The bond market still has a long way to go on the down side considering the rapidly growing national debt. Back in 1981 or 1982, the 30 year Treasury was yielding around 15%.
Interesting news:
“A new multi-year study has concluded that Trump Derangement Syndrome (TDS) was likely never a distinct psychological condition at all, but rather a temporary social-media-induced behavioural response.
Researchers found subjects previously diagnosed with TDS exhibited identical symptoms when exposed to Elon Musk, Brexit debates, or slow-moving supermarket queues. Scientists now believe the phenomenon was primarily driven by algorithmic outrage reinforcement and tribal signalling behaviour.
The American Psychiatric Association has therefore reclassified TDS as a “digitally amplified memetic stress reaction” rather than a clinical disorder.”
That’s it? That’s all you got?
Loser.