With the 30-year Treasury auction imminent, Trump's promise of $5,000 in cash handouts could impact the US Treasury market.

Trump's promise at a midterm election rally to give every American adult a $5,000 "bonus" injected new uncertainty into the already stressed U.S. Treasury market on the eve of a 30-year bond auction, reigniting concerns about Washington's fiscal discipline and policy predictability.

According to China News Network , on the 9th local time, US President Trump promised to give every American adult a $5,000 "bonus" if the Republican Party succeeds in retaining control of Congress in the November 2026 midterm elections. Following the announcement, US Treasury yields fluctuated within a narrow range.

The immediate pressure on the market comes from the upcoming auction of $22 billion in 30-year Treasury bonds this Thursday. The 30-year yield is currently near its highest level since the global financial crisis. Meanwhile, inflation data to be released later this week is also being closely watched by the market.

Contradictory policy signals exacerbate market confusion.

Trump's promise has puzzled some market participants, especially when compared to Treasury Secretary Bessenter's recent efforts to lower long-term yields.

"This contradicts what Bessant is doing, as it's trying to keep yields low," said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Asset Management in Tokyo. He added:

"I'm not saying this event will trigger a massive sell-off of US Treasury bonds, but it does raise a question: what exactly does the Trump administration want to achieve overall? Such signals are difficult to discern."

Bloomberg market strategist Mark Cudmore noted that the market reaction was extremely calm because investors believed the policy was almost impossible to implement. However, he also warned that the US economy already faced overheating risks, and injecting large-scale fiscal stimulus under financing pressure would exacerbate multiple risks already on the market's mind—weakening US Treasury bonds, a depreciating dollar, and capital inflows into commodities and physical assets.

Fiscal concerns coupled with inflation risks put pressure on US Treasury bonds.

Trump's remarks came at an already fragile time for the US Treasury market. Continued tensions in the Middle East pushed oil prices higher, and market bets on another Federal Reserve rate hike intensified, further weighing on US Treasury performance. Meanwhile, the total US public debt has surpassed $40 trillion for the first time, and concerns about fiscal sustainability persist.

Against this backdrop, the 30-year yield has risen to its highest level since the financial crisis, partly due to the Treasury's announcement that its plan to repurchase up to $6 billion in long-term bonds was lower than market expectations, disappointing investors who were hoping for a larger-scale operation.

DBS Bank senior interest rate strategist Eugene Leow said:

"This policy makes the midterm election results even more of an either-or situation for US Treasury investors. If the Republicans succeed in retaining control of both houses of Congress, fiscal concerns could escalate dramatically."

The commitment faces numerous obstacles and a complex political background.

Analysts generally believe that even if Republicans retain their majority in Congress in November, the proposal still faces significant legislative hurdles. According to the Financial Times, many Republicans are cautious about such large-scale spending measures, and the prospects for congressional approval are not optimistic. Trump also did not specify the source of the funds in his speech, only requiring that the dividends be used within the United States.

On the political front, according to NBC News, recent polls show a significant drop in support for Trump and his handling of the war among Republicans, indicating a widening of divisions within the party. USA Today, citing a September 6 poll, reported that only 32% of Americans approve of Trump's job performance, a 3-percentage-point decrease from the previous month.

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