The bond market, not the Fed, sets the long-term interest rates that drive mortgages, stocks, and even White House decisions — and that makes it a weapon other countries can use against the US.

• The Fed only controls short-term rates; the market sets long-term rates like the 10-year Treasury.
• When investors dump US bonds, bond prices fall and interest rates automatically jump.
• China is selling US Treasuries to push American borrowing costs higher and strain the economy.
• If rates rise too fast, parts of the US economy are forced to cut debt, which hurts growth.
• That pressure could leave the Fed with little choice but to cut rates.

Outlook: Expect more pressure on the Fed to lower rates if foreign selling keeps pushing long-term borrowing costs up.