Bessent's Triple Threat: US Treasury Takes Aim at Yield Curve
US Treasury Secretary Scott Bessent has taken recent actions to address bond market strain, according to Nigel Green, CEO of deVere Group. In a coordinated effort, Bessent orchestrated the first US currency intervention since 1998 to support the yen, reduced the risk that Japan would need to sell US government bonds to fund its own currency defence.
Green noted that this move, along with two others, signals that Washington is worried about something bigger than yields. The 30-year Treasury yield climbed above 5.2% following the Federal Reserve's July 29 meeting, its highest level since 2007 and a 19-year high, while the 10-year yield pushed to levels last seen in January 2025.
Bessent then introduced a subtle shift in Treasury's quarterly debt guidance that markets interpreted as opening the door to reduced long-bond issuance. He has also publicly defended Federal Reserve Chair Kevin Warsh's communication approach following a meeting that initially unsettled bond markets further.
Green believes that these three separate actions from Bessent within one week indicate that Treasury is showing concern for the long end of the yield curve, not just a passing market mood. The intervention in particular stands out as a clear sign of Washington's worry about a scenario where Japan sells Treasuries to defend the yen.