FT News Briefing Bond investors are counting on US tariff revenues
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Sep 5, 2025 The podcast dives into the Federal Reserve nominee's promise to maintain independence amidst concerns over Trump’s influence. It highlights bond traders betting on tariff revenues to support U.S. finances. There's a discussion on Nasdaq's crackdown on 'pump and dump' scams affecting small-cap stocks. Jumia, dubbed the 'Amazon of Africa', shares its struggle to prove profitability with a focus on a realistic consumer base and the challenges of competition from low-cost rivals. Jumia's adventure reflects the complexities of e-commerce in Africa.
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Fed Nominee Pledges Independence
- Stephen Myron told senators he would act independently if confirmed to the Fed despite agreeing with Trump's rate-cut view.
- His nomination raises concern because it could shift the Fed board toward presidential-aligned policies.
Tariffs Viewed As Deficit Offsets
- Bond investors now expect tariff revenues to help offset the fiscal hit from Trump's large tax cuts.
- That view hinges on tariffs remaining in force and legal challenges not voiding the receipts.
Deficit-Yield Vicious Cycle
- A rising deficit can trigger a vicious circle where bond sell-offs push yields up, increasing borrowing costs and worsening the deficit.
- That feedback loop is a core worry driving recent treasury market moves.