Nigel Green, CEO of deVere Group, one of the world’s leading financial advisory and asset management firms, has issued a warning that the US could face a bond market crisis similar to the one seen in the UK under former Prime Minister Liz Truss, potentially by mid-2025.
This cautionary note was delivered during a packed client webinar on Friday, following a panel discussion regarding the substantial $9.5 trillion tax cuts proposed by former President Donald Trump. Green highlighted concerns that these proposed cuts could lead to an unsustainable fiscal crisis in the US.
While Trump’s tax cuts would require significant financing, his heavy reliance on tariffs as a funding source is insufficient. Even with an extreme scenario of imposing a 20% tariff on all imports and a massive 60% tariff on Chinese goods, it would only generate $4.5 trillion, falling far short of the required funds to cover the tax cuts.
Green’s comments suggest that these fiscal policies could trigger a crisis, putting the US bond market at risk by 2025.
“This fiscal black hole is getting larger and larger and sending the budget deficit of the world’s largest economy skyrocketing,” warns Nigel Green, CEO of deVere Group.
“Bond markets are watching closely, and there’s a legitimate risk that if investors get spooked and start selling off US Treasuries en masse, we could see a repeat of the UK’s Liz Truss debacle —but on a much larger, more devastating scale.”
With the deficit spiraling out of control, bond investors could demand sharply higher yields to compensate for the risk, pushing up borrowing costs across the board.
If the Federal Reserve is forced to hike rates again to stabilize the situation, this would hammer businesses, homeowners, and financial markets alike.
“Trump’s tax-slash bonanza, without viable funding mechanisms, could set the stage for a full-blown fiscal crisis,” Nigel Green continues.
“The US dollar—currently a pillar of global stability—would be thrown into chaos. And let’s be clear: if the bond market revolts, it won’t be just an American problem; it will ripple across the world.”
The looming crisis bears striking similarities to the UK’s 2022 financial turmoil under former Prime Minister Liz Truss. Her aggressive tax-cutting spree without credible fiscal backing led to a swift and brutal bond market backlash, forcing an emergency U-turn that ultimately ended her premiership.
“Now imagine that scenario—but with the US, the world’s largest bond market,” says Green. “This would make the UK gilt crisis look like a minor tremor before an earthquake.”
deVere Group is urging investors to prepare for heightened market turbulence.
“A US bond market tantrum would send shockwaves through equities, currencies, and commodities,” Nigel Green cautions. “Defensive assets, strategic diversification, and hedging strategies will be key.”
He concludes: “If the bond market loses faith in US fiscal credibility, the fallout will be historic.”
