Peter Schiff Questions Trump 'Market Manipulation,' But Treasury Yields Hint At Something Even More Dangerous

The Trump administration may be forced to temper the Iran conflict as borrowing costs surge, with the 10-year Treasury yield up 45 basis points since late February.

The Bond Market Pressure Point

Gold advocate Peter Schiff on Monday questioned why Trump dramatically escalated the war Saturday only to reverse course before markets opened, asking whether it was “market manipulation” or an indication the president has no idea what he’s doing.

The answer may lie in Treasury markets.

According to The Kobeissi Letter, the 4.5%-4.6% range represents a critical line in the sand?the same level where Trump pulled back from sweeping Liberation Day tariffs last April.

“As the 10-year note yield surged above 4.50%, President Trump began floating a potential tariff pause. And, once the yield broke above 4.60%, he officially implemented a 90-day pause on reciprocal tariffs on April 9th, 2025,” The Kobeissi Letter noted.

The Swap Spread Warning

ING’s Padhraic Garvey warned that if the 10-year U.S. Treasury swap spread blows past 60 basis points from just below 50 basis points currently, it would spell enough trouble to shape the war path. 

Rising swap spreads increase the implied cost of funding for the U.S. government, making it more expensive for the heavily-indebted federal government to issue new bonds.

“Narrow swap spreads are the good look. Wide swap spreads are the opposite,” Garvey said, emphasizing this isn’t just about perception?it increases borrowing costs and could ripple through the financial system, tightening credit conditions and leading to risk aversion in both stocks and Bitcoin (CRYPTO: BTC).

The 5% Breaking Point

If the yield breaks the 4.5%-4.6% range, it could rise to 5%?the level analysts have flagged as a make-or-break point for risk assets. 

According to The Kobeissi Letter, the U.S. economy cannot sustain a 5% level in the 10-year yield.

Arthur Hayes, co-founder of BitMEX and chief investment officer at Maelstrom Fund, previously stated that a rise in the 10-year yield above 5% could trigger a mini-financial crisis, forcing the Fed to step in with liquidity injections.

The Bitcoin Implication

Bitcoin could initially drop in a knee-jerk reaction to yields breaking 5%, but liquidity injections could quickly recharge bulls. 

The pattern mirrors historical Fed interventions during market stress when policymakers flood the system with capital to prevent broader financial contagion.

On Monday, Trump paused attacks on Iranian infrastructure, claiming productive talks with Iran, though Iran denied having any contact. 

Early Tuesday, U.S. and Israeli forces reportedly struck new Iranian energy facilities, including a natural gas pipeline in Khorramshahr, suggesting the pause may be short-lived.

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