Treasury Yields Stuck in Neutral as Jobs Disaster Meets Trump Policy Chaos

President Trump’s push for lower interest rates faces structural obstacles far beyond Fed Chair Jerome Powell’s control. The era of cheap money that lasted over three decades is ending due to powerful economic forces: retiring Baby Boomers are spending rather than saving, China has stopped recycling trade surpluses into US Treasuries, and massive government debt plus AI investments are driving up credit demand. Bloomberg Economics analysis suggests 4.5% may be the new normal for 10-year Treasury rates—a dramatic shift from the ultra-low rates that fueled housing and stock market booms. While Trump may appoint dovish Fed members, these deeper supply-and-demand

Silver has surged nearly 25% year-to-date in 2025, breaking above $35/oz to reach decade highs around $38. The rally is driven by a persistent supply deficit that has lasted seven consecutive years, with a cumulative shortfall of almost 800 million ounces since 2021. Industrial demand, particularly from solar panels and electronics, accounts for 59% of silver usage and continues growing. With the gold-to-silver ratio at 91 (versus historical average of 67), silver appears undervalued. Diminished freely-traded inventories have created conditions for a potential “silver squeeze,” where even modest demand increases could trigger sharp price spikes.

Citi has raised its three-month gold price target to $3,500 per ounce from $3,300, citing deteriorating US economic conditions and inflation concerns. The bank expects gold to trade between $3,300-$3,600 as Trump’s new tariffs on dozens of countries, weak labor data showing only 73,000 jobs added in July, and a weakening dollar create favorable conditions for the precious metal. With markets now pricing an 81% chance of a September Fed rate cut and growing concerns about institutional credibility, gold demand has surged by over one-third since mid-2022, nearly doubling prices.

Oil prices fell over 1% Monday after OPEC+ confirmed it will increase production by 547,000 barrels per day in September, continuing its strategy to regain market share. Brent crude dropped to $68.82 and WTI to $66.51 per barrel. The move reverses OPEC+’s previous cuts of 2.5 million barrels per day. Meanwhile, markets remain nervous about President Trump’s threat of 100% secondary tariffs on Russian oil buyers, which could impact 1.7 million barrels per day of supply, though India has indicated it will continue purchasing Russian crude despite the warnings.