Strong warning ~ ⛾:Kaffibolla

Good morning. Bond vigilantes descend on Treasuries. We speak to Jamie Dimon about the US economy. And a Google co-founder gives away almost $700 million. Listen to the day's top stories.

Investors are sending a strong warning to Donald Trump and Congress about the dangers of a swelling deficit. Yields on 30-year Treasuries rose to as high as 5.1% Wednesday, leaving them just shy of a two-decade record. Stocks also fell amid concern that Trump's tax-cut plan will add trillions of dollars in coming years to already bulging budget deficits at a time when appetite for US assets is waning.

StanChart on 'Buy America' Trade, Outlook for Treasury Yields

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Two members of the Israeli Embassy's staff were fatally shot outside the Capital Jewish Museum in Washington on Wednesday night, US Homeland Security Secretary Kristi Noem said. The shooting occurred around 9 p.m. near Georgetown University's Law School and the FBI's Washington field office, according to police.

JPMorgan CEO Jamie Dimon said he can't rule out the US economy falling into stagflation as it faces huge risks from geopolitics, deficits and price pressures. "I don't agree that we're in a sweet spot," he told Bloomberg TV. The Federal Reserve is doing the right thing to wait and see before it decides on rates, he said.

The UK urged its G-7 allies to agree a cut to the price cap on Russian oil, saying the move is necessary to put further pressure on President Vladimir Putin to end Russia's war in Ukraine. Separately, the WSJ reported that Trump told European leaders on Monday that Putin isn't ready to end the war because he thinks Russia is winning. But Russian forces have only made small territorial gains this year.

German Chancellor Friedrich Merz for the first time publicly advocated spending up to 5% of GDP on defense. Europe has been stepping up, with the EU's 27 member states giving initial approval to a €150 billion defense fund that will distribute money to countries looking to invest in security capabilities, people familiar said.

Deep Dive: Is Debt Old-Fashioned?

As one of the world's largest sovereign wealth funds warned this week that private equity is "very troubled" right now, a spate of recent buyout deals in Europe and the US points to one possible route out of the mire: A deep shift in how much debt this industry uses to fund its takeovers.

KKR has been busily dealmaking despite the gloom around Trump's tariff upheavals, snapping up a couple of Swedish health specialists in the process.
Thoma Bravo, meanwhile, has pulled together one of the year's biggest buyouts with the $10.6 billion purchase of Boeing's Jeppesen navigation unit and other assets.

The Big Take

Trump Family Turns Presidency Into Most Lucrative Venture Yet

Since he launched his campaign, the family has put dealmaking in overdrive—with memecoins, guns and new hotels abroad.

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Opinion

AI is lying to survive and nobody seems to care, Parmy Olson writes. Lawmakers are neglecting AI safety even as it shows more deceptive behavior, and that is a grave mistake.

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