Here’s how Bessent’s newly activist Treasury Department is undercutting the Fed’s Warsh

Live updates

1. 23d ago

   Treasury's bond buys undercut Fed's Warsh, fuel inflation fears

   The US Treasury's recent bond purchases, led by Secretary Scott Bessent, aimed to stabilize markets but are having the opposite effect, fueling inflation concerns and reviving the global debasement trade. The interventions, intended to support bond prices, are failing to materialize as the Treasury's internal funding for these purchases remains unclear. This development is at odds with Federal Reserve official Warsh's efforts.

   Why it matters

   The Treasury's activist strategy involves buying government bonds to calm investors, but market reactions suggest this approach, referred to as the Bessent bid, is not working as intended. The unclear funding for these purchases adds to the uncertainty. This situation is significant because it may impact the US dollar's value and the global economy.

   What is confirmed

   • Scott Bessent's Treasury bond purchases are fueling concerns over inflation and reviving the global debasement trade.
   • The Treasury's internal funding for these bond purchases remains unclear.
   • The intended support for bond prices, referred to as the Bessent bid, is failing to materialize.

   Still unconfirmed

   • The Treasury's debt buyback risks putting the dollar in a devaluation spiral like the yen.

   What to watch next

   • The Treasury's next bond purchase announcement
   • Federal Reserve official Warsh's response to the Treasury's actions
   • US dollar value fluctuations
   Sources used for this update (4)

   1. Yahoo Finance — Scott Bessent is ‘playing with fire’ as the Treasury’s debt buyback risks putting the dollar in a devaluation spiral like the yen, economist warns
   2. Axios — Was the Treasury 's market intervention worth it?
   3. Barron's — Bessent’s Interventions Have Fizzled. The Real Problem Is the Deficit.
   4. consent.yahoo.com — Bessent Has No Easy Fix for What’s Really Driving Bond Yields Up
   confidence 70%
2. 24d ago

   Bessent's Treasury Bond Purchases Spark Inflation and Debasement Fears

   Treasury Secretary Bessent has initiated an activist strategy of buying government bonds to stabilize markets, but the move is undercutting Federal Reserve official Warsh. Instead of calming investors, these bond maneuvers are fueling concerns over inflation and reviving the global debasement trade. Market reactions suggest the intended support for bond prices, referred to as the Bessent bid, is failing to materialize as the Treasury's internal funding for these purchases remains unclear.

   Why it matters

   The Treasury and the Federal Reserve typically coordinate to manage national debt and monetary policy. Conflict between these two entities can create market volatility and confuse signals regarding inflation targets.

   Still unconfirmed

   • The Treasury Department is buying its own bonds.
   • Bessent's bond maneuvers are fueling the global debasement trade.
   • Bessent's strategy is undercutting Federal Reserve official Warsh.
   • The bond gambit is causing inflation worries.

   What to watch next

   • Clarification from the Treasury on the funding source for bond purchases.
   • Official response from the Federal Reserve regarding the Treasury's activist stance.
   Sources used for this update (5)

   1. CNBC — Bessent's bond gambit aimed at calming markets is instead stirring inflation worries
   2. Bloomberg — Bessent’s Bond Maneuvers Giving Global Debasement Trade New Life
   3. Reuters — Morning Bid: So much for the Bessent bid
   4. Forbes — Treasury Is Buying Its Own Bonds. Where Is The Money Coming From?
   5. MarketWatch — Here’s how Bessent’s newly activist Treasury Department is undercutting the Fed’s Warsh
   confidence 70%