Bond Vigilantes vs Bessent: High-Stakes Showdown Threatens Volatility

Treasury Secretary Bessent is taking on the 'bond vigilantes,' refusing to back down in what's shaping up to be a high-stakes game of cat and mouse. The bond market is watching closely, with many expecting a rate hike this week.

The trajectory of the 10-year Treasury yield is telling, with a target locked in at 5%. When the market gets what it wants, it usually gets exactly that, no more, no less.

Gold prices have been rising alongside bond yields, but are now taking a hit due to increasing odds of a rate hike. Western traders' emotional swings have victimized the metals market, and with a 100% chance of a Fed rate hike looming large, gold is trading down once again.