Wall Street will try to bring down Donald Trump, like the Bank of England sank Liz Truss’s government, JD Vance has warned.
The vice presidential hopeful said he thought investors “who are getting rich off of globalisation” would spike the US bond markets if Trump wins a second term in order to bring down his government.
In an interview with Tucker Carlson, Mr Vance compared activist investors under a Trump administration to the behaviour of the Bank of England during Ms Truss’s short tenure in Downing Street.
He said that if Trump won this year’s election, his opponents would emerge when he “tries to do things”, like deporting migrants en masse.
“They’re going to take him down and try to take him down in a very big way,” he said.
Noting the high cost of servicing US government debt, Mr Vance claimed that investors on Wall Street who oppose Trump could attempt to sink his presidency by raising bond yields.
“In 200-plus years of being an American republic, we’ve never had a true debt spiral in this country,” he said, warning that the Government’s interest rate could reach 8 per cent.
“So I really worry…do the bond markets, do the international investors, the people who are getting rich off of globalisation, the people who have gotten rich from shipping our manufacturing base to China, the people who’ve gotten rich from a lot of wars…do they try to take down the Trump presidency by spiking bond rates?”
Mr Vance compared the scenario to government borrowing rates in the UK after Ms Truss’s mini-budget in September 2022, which spooked markets with unfunded tax cuts.
“I think it’s probably the most important and the most impactful way they could try to take down his presidency is by spiking the interest rates,” he said.
“You saw this, by the way, Tucker, [with] Liz Truss in Britain.
“I like Liz Truss. I disagree with her on a lot of issues, so I’m not trying to stand up or say Liz Truss is my person.
“But look, she came in, she had a plan and the Bank of England I think made a lot of mistakes – maybe intentional – interest rates shot through the roof and it took down her government in a matter of days.
“Of course, we don’t have the same style of government, but it would be devastating to the president if you had this bond market death spiral, and that’s one of the things we’re going to have to fight against when we win.”
$4 trillion debt
The total stock of US government debt has increased by more than $4 trillion since Joe Biden took office in 2021, although much of the spending was pandemic-related. The annual cost of servicing the US’s international loans is now greater than the defence budget.
Trump has pledged to bring economic stability to the government if he is elected later this year. His campaign has also promised a variety of tax cuts for blue-collar workers, including a ban on taxing tips and overtime.
On Wednesday, the Federal Reserve cut the base interest rate from what was a 23-year high of between 5.25p per cent and 5.50 per cent to a lower range of 4.75 per cent to 5 per cent.
The central bank said that while it had “gained greater confidence that inflation is moving sustainably toward 2 per cent”, the economic outlook is still “uncertain”.
Polls show that inflation and the economy are the most important issues for voters across the swing states, which are divided on whether they trust Trump or Kamala Harris more on economic issues.
Trump has accused Jerome Powell, the Fed chairman, of planning to cut interest rates to benefit Ms Harris ahead of the election.
He said Mr Powell, who is required to be politically neutral, was “political” and wanted to “help the Democrats”.
Responding to those accusations on Wednesday, Mr Powell said: “Our job is to support the economy on behalf of the American people, and if we get it right, this will benefit the American people significantly. We don’t put up any other filters.”
Ms Harris’s campaign welcomed the interest rate announcement, but said the government must also take separate action to bring down prices. She has proposed a federal ban on “price gouging” by grocery retailers.
