US President Donald Trump's pledge of a $5,000 national cash payout for a Republican Party midterm election victory has injected fresh uncertainties into the Treasury market, particularly ahead of an upcoming 30-year bond auction. This promise has reignited concerns about Washington’s fiscal discipline and unpredictable policymaking. Following Trump's announcement, US Treasury yields have fluctuated within a narrow range.
Trump made these remarks at the Republican Midterm Convention in Dallas, stating the payment would be called the "Trump dividend" if Republicans maintain control of the House and Senate. He did not provide details on the proposal, and analysts generally view it as unlikely to become law. This comes as the 30-year Treasury yield is nearing its highest level since the global financial crisis.
All eyes are now on the $22 billion auction of 2056-maturity Treasuries scheduled for Thursday. The market is also anticipating the release of CPI data later this week. The US government's earlier plan to purchase up to $6 billion in longer-dated Treasuries in a single operation had already disappointed some market investors, further adding to the current unease.
