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By Peter Coy

Opinion Writer

What happens if the irresistible force of President Trump meets the immovable object of Wall Street? Wall Street will win.

Nothing personal against Trump, of course. A lot of people on Wall Street support him. I remember the standing ovation he received last year when he spoke to the Economic Club of New York, which, despite its name, consists mostly of finance people, not economists.

But traders can’t afford to let sentiment or political preferences influence their decisions. If things start to go wrong and they conclude that Trump is bad for stocks and bonds, they will sell. That will push stock prices down and interest rates up. That will sting Trump, who cares a lot about the markets. Worse, it will hurt the nation’s finances, since high interest rates will raise borrowing costs and worsen the federal deficit.

In other words, Wall Street just might be one of the few institutions in America capable of constraining Trump, who has bent the Republican Party to his will, pushed the Democratic Party aside and exerted influence on the bureaucracy, the judiciary, corporations, the news media and other power bases.

It has happened elsewhere: Negative reactions from the financial markets doomed the prime ministerships of Silvio Berlusconi of Italy, who resigned in 2011 during a debt crisis, and Liz Truss of Britain, who resigned in 2022 after just 44 days in office when her promised tax cuts sent the British pound into a tailspin.

To be sure, the U.S. economy is in far better shape than Italy’s and Britain’s were at the times of those resignations, and the dollar is actually strengthening, not weakening. There’s no sign of the kind of crisis of investor confidence that would pressure Trump to deviate from his plans.

What’s more plausible is a strong nudge from the markets, not a hard shove. That would resemble what happened in the bond market crash of 1994, which led James Carville, President Bill Clinton’s adviser, to say he’d like to be reincarnated as the bond market because “you can intimidate everybody.”

In the 1980s, the economist Edward Yardeni coined the term “bond market vigilantes” for bond traders who constrain governments by pushing up interest rates when they........

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