Bessent Tests Influence in Financial Markets with Treasury Buyback Programme
US Treasury Secretary Scott Bessent is putting his claims to the test in financial markets. He says he has information unknown to market participants and is challenging investors to take positions against him.
Bessent made these comments after the US and Japan conducted joint intervention in the yen market during the summer. The Japanese currency has strengthened amid expectations of a Bank of Japan (BOJ) interest rate hike next week, which aligns with Bessent's information.
However, Bessent's strategy is not delivering results in the bond market. He expanded the Treasury buyback programme to push yields lower, but the move has yet to deliver results. The benchmark 10-year Treasury yield reached its highest level since 2023 this week.
The US bond market is actually moving in line with economic conditions, according to Reuters columnist Jamie McGeever. The economy is still growing, the labour market remains strong, while inflation is holding above the Federal Reserve's 2% target. Additional pressure is coming from the war with Iran, which is expected to continue for months and could worsen inflation.