The Game between US Treasuries and US Stocks The Importance of US Debt As the cornerstone of the global financial market, US treasury bond bonds are not only the main financing tool of the US government, but also an important indicator for international investors to assess the health of the US economy. By 2025, the size of the US federal debt may have further expanded (based on recent trends, the debt may exceed $35 trillion), making debt servicing costs a core pressure point for fiscal policy. The interest rate of US debt (i.e. the yield of treasury bond) directly affects the total amount of interest that the government needs to pay. In the current environment, the Trump administration sees lowering US bond rates as the key to easing the fiscal burden. The DOGE department is also affected by this background. 2. Concerns about the rise of the US stock market As a symbol of the vitality of the US economy, the sustained rise of US stocks is often seen as a positive signal. However, in Trump's logic, an overheated US stock market may have negative effects: Capital diversion: The rise of the stock market will attract a large amount of capital to flow into the stock market, reducing demand for US bonds. The decline in demand for US Treasury bonds will push up yields (interest rates) and increase government borrowing costs 🎯 Risk of overheated economy: An excessively high stock market may trigger a foam and increase the risk of future collapse, which is contrary to Trump's goal of maintaining economic stability. Political considerations: The rise in the stock market may be seen as a short-term achievement, but if the long-term debt problem cannot be resolved, it may undermine the sustainability of its economic policies. 3. Intention of funds flowing from the stock market to US bonds Trump's potential strategy is to "squeeze" funds out of the stock market and reallocate them to the US Treasury market through policy guidance or market signals. The implementation of this flow may rely on the following mechanisms: Tax or regulatory measures: Increasing taxes on stock market investment returns or imposing restrictions on corporate stock buybacks to reduce stock market capital inflows. Publicity and market confidence: emphasize the safety and importance of US bonds through public statements, and attract institutional investors and retail investors to buy treasury bond. The inflow of funds into US Treasury bonds will increase demand, lower yields, and thus reduce the interest costs paid by the government. 4. Market reaction uncertainty Investors may not fully turn to US Treasury bonds as expected, especially if the global economic environment is volatile, they may choose other safe haven assets such as gold or the Japanese yen. Economic cost: Deliberately suppressing the stock market may lead to difficulties in corporate financing, affect employment and economic growth, and conflict with Trump's consistent economic growth goals. In the short term, Trump may face criticism for the underperformance of the stock market, but if he can prove the effectiveness of debt management, it may solidify his image as an economic strategist. 5. Core Conclusion If Trump prioritizes US Treasury bonds, it will naturally not help the US stock market rise. This strategy of guiding funds to flow into US Treasury bonds is based on the economic concept of fiscal sustainability of major countries. This logic holds in theory, but in execution, it is necessary to balance the contradiction between stock market stability and bond market demand. In the coming months, Federal Reserve policies, market sentiment, and the global economic environment will become key variables. If the new official takes office successfully, the United States may usher in a low interest rate and high stability fiscal environment; If it fails, it will exacerbate economic fluctuations and even trigger a new round of market crisis.