Now Reading: Bessent moves to calm bond market as yields hit 19-year high
-
01
Bessent moves to calm bond market as yields hit 19-year high
US Treasury Secretary Scott Bessent has taken several steps in the past week to stem rising bond yields, including intervening in currency markets to support the Japanese yen for the first time…
The Story in Brief
US Treasury Secretary Scott Bessent has taken several steps in the past week to stem rising bond yields, including intervening in currency markets to support the Japanese yen for the first time since 1998 and altering the language on future debt sales to signal a possible reduction in long-term issuance. Long-term US interest rates recently hit their highest level in 19 years. Bessent's moves come as inflation remains above target for five years, and the US runs nearly $2 trillion in annual deficits. A BMO survey found 61% of investors now expect a decrease in 30-year Treasury auction sizes. Bessent also defended new Fed chairman Kevin Warsh, saying investors need a 'detox' from constant Fed commentary.
The Indian Opinion
The narrative that Trump can bully the Fed into cutting rates ignores the bond market's discipline. Bessent's interventions are tactical, but the real drivers, stubborn inflation and massive deficits, remain. The hype about quick fixes overlooks that yields have risen despite Trump's second term. Watch the 10-year yield: if it stays above 4.5%, the administration's room to manoeuvre shrinks. Can Bessent convince investors that the US will control its debt?
Source: hindustantimes.com
This story was synthesised by AI from the source linked above.
