It is often said the tycoons know how to put America’s fiscal house in order – but the smart money says that’s not the case

When the US presidential election was called for Donald Trump, the yield on 10-year US government bonds increased from 4.3% to 4.4%, and the 30-year bond yield rose from 4.5% to 4.6%, with both remaining at those levels 10 days later. As the bond market declined – higher yields mean lower prices – the stock market rose. Clearly, investors expect the next Trump administration to produce higher government budget deficits and more debt.

It is not difficult to see why. During Trump’s first term in office, he added $8tn to the national debt – all previous presidents combined had accumulated $20tn – despite having promised to run budget surpluses so large that they would eliminate the national debt within two terms.