The last two days in the bond market have been, well… ugly—and pretty confusing. I keep pointing to the typical “flight to safety,” but this time, something different played out.

Around 10am, a rumor started circulating on X that the White House was planning to suspend tariffs on every country except China for 90 days.

The market reacted fast. The S&P 500 surged, gaining nearly $3 trillion in value. But when the White House denied the rumor, nearly $2.5 trillion of that gain was wiped out.

So what’s the big issue? That kind of extreme volatility triggered margin calls across the market. Investors had to come up with cash quickly, which led to selling off assets—primarily Treasuries. And when Treasuries sell off, bond prices drop and yields rise… which means mortgage rates just went up.

Define Margin Call – a demand by a broker that an investor deposit further cash or securities to cover possible losses.

Bond market, down is higher rates.

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