‘In Trump we Truss’: Sometimes, only a US diplomat, or three, can say it all
Three ex-US diplomats drew a sharp parallel between Donald Trump and Liz Truss — warning that turmoil in US Treasuries may signal a loss of safe-haven status, echoing Britain’s 2022 market meltdown.
S ometimes, it takes a diplomat to be rude in the politest way possible.
When it’s a trade war, it may take three diplomats.
Or three former US diplomats if they’re talking Trump’s America.
John Fowler, Helen Zhang and Jeremy Dicker, who write the incredibly sharp newsletter International Intrigue, sent out a take with the following headline: “In Trump we Truss”.
That four-word takedown of America’s president said it all.
It summed up:
The hubris.
The ignorance.
The arrogance.
The casualness with which a politician can dare to play around with people’s daily bread, their homes, car loans, savings, pension funds… everything.
Just a reminder at this point that Liz Truss was Britain’s shortest-serving prime minister ever. She lasted just 49 days in office, having been put there by her Conservative Party (a party election rather than a general election).
She was forced to leave office after triggering unprecedented market turmoil in 2022 after a mini-budget proposal that had massive tax cuts and massive government borrowing. Yields on British government bonds spiked and Ms Truss’s (mis)management of the economy came under intense pressure.
So what’s the reason to yoke the two surnames ‘Trump’ and ‘Truss’ together?
Well, the International Intrigue newsletter arrived on April 9 along with the stunning news that US Treasuries were up, having been sold off in 48 hours. Analysts started to suggest that the way things were going could perhaps be interpreted as a loss of investor confidence in the world’s largest sovereign debt market. Some strategists speculated that it may signal “a regime shift whereby US Treasuries are no longer the global fixed-income safe haven.”
Though this is by no means certain as of now, the febrile nature of events and the commentary around them started to feel like the Truss period, when everything was moving very fast and very poorly for Britain.
As the International Intrigue diplos put it, in scrupulously polite terms:
The news on US Treasuries could be one of many things:
“a) just be another big unwinding of the basis trade (a common hedge fund bet on the price gap between Treasuries and futures)
b) The US might now be losing its safe-haven appeal, and/or
c) The markets might fear stagflation ahead (slow growth and high inflation).
If it’s more a combination of b) or c), that’ll prompt fears that Trump might’ve just pulled a Liz Truss.”
Well said.
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