Bessent faces bond-market test as Treasury tries to rein in long-term yields
US Treasury secretary Scott Bessent is taking on increasingly sceptical bond investors as Washington attempts to contain rising borrowing costs in the $32tn Treasury market without addressing the deeper fiscal pressures driving yields higher, according to a report by then Financial Times.
US Treasury Secretary Scott Bessent is grappling with a rising challenge amid efforts to control long-term bond yields in the $32 trillion Treasury market. Despite announcing plans to double its purchases of longer-dated government bonds from next month, the move has only resulted in short-term gains for 10- and 30-year Treasuries, which have since seen their yields climb back up.
Bessent, known for his interventionist approach, contends that current yields do not accurately reflect economic fundamentals, citing factors like the Iran conflict and liquidity issues in the 30-year market. The administration plans to increase its regular purchases of Treasuries with maturities between 10 and 30 years from approximately $2 billion to at least $4 billion starting September 9.
However, analysts argue that the measures alone may not suffice and may only serve as a "band-aid on a bullet hole".
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