Bond rout starting to sound market alarm bells

Most commentary, for and against, has been exclusively on the economics, and from that perspective it makes little to no sense. But I've seen suggestions in a couple of places that there are relevant "national security" motivations, or to put it bluntly, a greater freedom to wage war - or at least to put oneself in a position where the threat of it would be more realistic. Decoupling the US economy from the rest of the world, but especially from China, makes sense if the strategic cost-benefit analysis sees a significant potential for war with that country. It's a commonplace of international relations, and intuitively obvious, that the more integrated are the economies of two countries, the less likely they are to start wars with each other (no doubt there are exceptions, but as a rule...). That doesn't have to mean anything imminent or indicate concrete plans on the part of US, but it's plausibly a factor in the overall calculations.

In fact, the economic interdependence of the US and China had seemed to be a big reason to remain hopeful that there wouldn't be a war between them, among other reasons of course. Reducing this interdependence seems to destabilize this situation. The unfortunate fact is that I can't see the US military establishment just peacefully allowing China to become more militarily powerful than itself. I'd be happy to hear other perspectives on this, I'm far from an expert and haven't seen this angle discussed much.

There may also be some panic selling by speculators or people worried about their bonds - higher market rates makes the prices of bonds fall.

The 2s-10s spread tends to act a bit like brakes for the economy. The 10 year yield is largely down to inflation and the 2 year largely controlled by the federal reserve. They raise the 2 year above the 10 year to slow the economy if you are getting inflation and lower it if the economy looks like slowing too much and going into recession. This looks like people expecting recession.

There is a clear risk that the US will instead lump trillions of losses on foreign investors and attempt to protect the purchasing power of their voters. It isn't like they're fooling anyone either way - they borrowed a bunch and can't pay it back. They can pretend they paid it back but the markets are going to respond to the magnitude of the losses and not the excuses. The leadership may as well let the bulk of the damage fall on people who don't vote in US elections - there isn't any particular reason to do otherwise.

The US could choose to tank their own currency but it'd be more orderly and the incentives certainly could be aligned to formally default regardless.

'The labor market will reallocate to productive jobs' doesn't take into account the experience of having ones income security disappear as an industry is shipped overseas, then having to retrain into a new field.

And the US largely didn't fund that, at least in a meaningful, at scale, don't-piss-people-off way.

Those at the top reaped the benefits of free trade; those at the bottom suffered the pain.

Trump (the character) was voted in on the basis of that anger, something the Democrats never seemed to understand.

It'll be curious what the reaction is to serious economic pain in the midterms.