Your loans are getting way more expensive —and Trump just made it worse

U.S. government bond yields have jumped to new multiyear highs — which will result in higher costs for mortgages, car loans, student loans, and all other borrowing.

In other words, the affordability crisis is growing even worse.

Treasury Secretary Scott Bessent isn’t the cause (I’ll get to that in a moment), but he’s making a colossal mess of it.

At 11 a.m. ET yesterday, his Treasury Department announced that it would repurchase $6 billion worth of 10- to 20-year government bonds, hoping that fewer bonds on the market would drive up demand, pushing down rates (yields) that have soared to levels not seen in decades.

Instead most Treasury yields sharply jumped on the announcement. The 10-year bond yield surged to as high as 4.85 percent, its highest since November 2023. The 20- and 30-year bond yields surged to as high as 5.3 percent. (Note: When Treasuries fall, their yields rise.)

Bessent can’t beat the bond market. To the contrary, his interventions are causing traders to worry all the more about the stability and intelligence of the United States when it comes to economic policy.

Bonds are being driven upward mainly by concerns about inflation. Where are these concerns coming from? First and foremost, from Trump’s war in Iran, which is driving up oil prices. Brent crude futures are trading above $107 a barrel, while the 10-year Treasury yield climbed above 4.9 percent — its highest intraday level since October 2023.

Following a flare-up in attacks by both sides, Trump advisers are now privately suggesting the conflict could drag on through the end of his term in 2029.

Reacting to the same inflation concerns, the European Central Bank raised interest rates Thursday, saying it expected inflation to remain above target for an extended period.

And then there’s Trump’s vow yesterday to pay each of America’s 270 million adults a $5,000 check if Republicans keep control of Congress in November, which would cost $1.3 trillion — making such a plan prohibitively costly for a country with a $40 trillion national debt. (By the way, it’s illegal to pay people to vote your way.)

It won’t happen, of course, but the mere possibility is fueling further inflation fears.

Why didn’t Bessent try to dissuade Trump from making this incredibly stupid vow?

Global inflation fears are also being driven by Trump’s inane tariffs, including his trade war with Canada.

Why hasn’t Bessent tried to dissuade Trump from entering this trade war?

And what is Bessent saying in public about any of this? Is he using the bully pulpit to reassure world markets?

Just the opposite. He’s sounding as looney as his boss.

In Bessent’s speech at yesterday’s Republican event, he warned that the progressive left is relentless in trying to turn America into a “socialist hellscape.”

“The radical left is relentless in their pursuit to remake America in the image of every socialist hellscape of the last century, to import the misery of failed workers’ paradises like the Soviet Bloc, Caracas and Havana.”

Bessent added that their “version of equality would drag everyone down instead of lift everyone up” and urged attendees to continue the political fight to push back against socialism.

Bad enough that this is just demented Cold War communist witch-hunt crap. Worse, it’s coming from the mouth of the U.S. secretary of the treasury, who’s supposed to be the adult in the room.

The credibility of a treasury secretary is critical to soothing markets and maintaining worldwide faith in the dollar. Bessent seems to be doing everything possible to lose credibility.

I’ve worked with several treasury secretaries and closely watched others, and I can honestly say that Scott Bessent is the worst I’ve ever witnessed.

Robert Reich is a professor of public policy at Berkeley and former secretary of labor. His writings can be found at https://robertreich.substack.com