Treasury Secretary Scott Bessent moved to calm the bond markets yesterday after a recent selloff made mortgages and other consumer loans more expensive.
Bessent's move to increase repurchases of long-term government notes and bonds (increasing demand for them) is largely symbolic but could still help bring those costs down.
Wall Street is skeptical the relief will stick, given that the Treasury Department's purchases are quite tiny compared with the roughly $30 trillion market for government debt.
The reason any of this matters is that the bond market impacts how much it costs everyone — the government, consumers, and companies — to borrow money. The bond market is getting squeezed from multiple directions. It sure looks like we’re in for a spell of rising interest rates.
Meanwhile, Mr. Trump’s unilateral war in the Middle East and de facto closure of the Strait of Hormuz is feeding inflation all the while destabilizing global security and the world’s economy. So much winning.
Yet we have gilded statuary, a ballroom, an airborne Qatari palace, reflecting pool and a triumphal arch.
Squirrel!
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