US Treasury Yield Breaks Trump Pain Threshold, TACO Expected to Rise Again, But This Time May Be Different

BlockBeats News, July 24th. Influenced by both macroeconomics and geopolitical conflicts, the U.S. Treasury bond yield has recently seen a significant increase. The 10-year Treasury yield rose to around 4.69%, reaching its highest level since January 2025, also a rare level since Trump's second term.

Previously, in trade disputes or geopolitical events, Trump often "chickened out" when the yield surged, softening policies through delay, exemption, and other means to appease the market. The market refers to this pattern as "TACO" (Trump Always Chickens Out).

However, it remains to be seen whether Trump will repeat the TACO this time.

On the one hand, the Office of the United States Trade Representative (USTR) announced on July 23rd local time that it has decided to impose a 10%-12.5% tariff on 60 economies. On the other hand, the current rise in yield is mainly due to geopolitical conflicts. Even if Trump is willing to compromise, the hardline stance of Iran may not be receptive. Additionally, with the midterm elections approaching, Trump needs to maintain a strongman image in diplomacy to present a "victorious" posture to domestic voters. Therefore, he is already at a disadvantage on the Iran issue and the TACO maneuverability is also constrained by domestic politics.

In conclusion, against the backdrop of internal and external challenges, if Trump wants to TACO again this time, he may need to put in extra effort and tactics.