Bankless · Friday, September 4, 2026
Treasury Secretary Yellen cautioned against fiscal irresponsibility, suggesting it's a key reason global bonds are underperforming. She believes the US economy's boom, driven by AI, makes it a more attractive borrower than the government itself, leading to less demand for its bonds.
“Saying that, look, we're the AI superpower, our economy is booming because of AI is true. And also precisely the reason why our bonds are less attractive is because our economy is more attractive as a borrower than the government is. Right? Like, his job is to be, he's Treasury Secretary. The Treasury is a pool of money managed by the government.”
“So if nobody's buying your bonds, that means that they perceive financial irresponsibility from the government. That's what's happening right now. That's the core of it. So don't let all the other stuff distract you. Like the American economy is booming. That's not because of the president. It's not because of the White House. It's because of the economy itself. The job of the government is to be a good steward of that, which is what the bond market right now is saying. You are not being good stewards.”