UBS Macro Research: If Trump's tariff policy is rejected, fiscal issues will be investors' top concern.

The prolonged selling of US Treasuries prior to this suggests that if Trump's tariff policy is rejected, fiscal issues will become investors' primary concern, as they worry that rising debt levels will worsen the budget deficit. Thomas Mathews, Managing Director of Capital Economics in the Asia-Pacific region, points out that the long end of the US Treasury yield curve is the most volatile, indicating that concerns about the fiscal situation are no less important than concerns about the Fed's interest rate path. Loss of tariff revenue will reignite the deficit issue.