Bessent's reassurances fall flat for investors
Credit investors in the riskiest corners of the market, always the first to surface confidence gaps, are doubting the Treasury secretary's reassurances.
Scott Bessent, the US Treasury secretary, appears unconcerned about the market's worries over economic growth and budget restraint. Despite his 3-3-3 plan to increase oil production, stimulate economic growth, and cut the deficit, he has failed to provide sufficient reassurance. The much-awaited bond buyback program, which was supposed to indicate concern but was too insignificant to make a difference.
Tensions are escalating as cracks emerge in the riskiest corners of the credit markets. JPMorgan strategists have reported that the amount of deeply distressed loans has skyrocketed to levels not seen since March 2020, with the technology sector being the most affected due to SaaS panic fears easing among stock investors but not among credit investors.
With rising global bond yields and Fed tightening, Bessent's credibility is being called into question as investors challenge his assurances.
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.