President Donald Trump's tariffs have had several unintended effects on the economy, but the unease they have created in the bond market has surprised investors around the globe. The tariffs sparked a bond market sell-off, and there was a second selloff after Congress passed Trump's "big beautiful bill." Concerns over the U.S. budget deficit may have sparked the second sell-off, but a Morgan Stanley (NYSE: MS) executive says the bond market panic is much ado about nothing.
Jim Caron, chief investment officer of Morgan Stanley's portfolio solutions group, thinks the current panic is overblown. He shared his opinions on U.S. Treasury bonds with Business Insider after yields hit 4.6% on 10-year bonds and 5.2% on 30-year bonds. That yield spike and accompanying market unease came on the heels of Moody's downgrading America's credit rating. Then the House of Representatives passed Trump's "Big Beautiful Bill," which could add trillions of dollars to the budget deficit.
