Scott Bessent’s bond intervention puts US Treasury on collision course with Fed

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1. 19d ago

   Scott Bessent's Bond Intervention Sparks Clash With Federal Reserve

   Scott Bessent is intervening in the US bond market, creating a conflict between the Treasury and the Federal Reserve. While Bessent seeks to tame markets, his actions are viewed by some as a collision course with the Fed and an obstacle to the plans of central bank chief Kevin Warsh. This friction occurs as global bond yields surge and the bond market resets expectations regarding the United States. Markets are reacting with a short squeeze in US swaps and options, a phenomenon referred to as the Bessent Put.

   Why it matters

   The struggle centers on the balance of power over US debt and dollar policy. This tension affects global financial stability and the attractiveness of Treasury bonds. The outcome will determine if the Treasury can successfully influence market rates independently of the central bank.

   What is confirmed

   • Global bond yields are surging.
   • A short squeeze is occurring in US swaps and options.

   Still unconfirmed

   • Kevin Warsh is conducting an experiment as central bank chief while Bessent obstructs him.

   What to watch next

   • Kevin Warsh's statements at the Jackson Hole conference
   • Market reaction to further Treasury buyback expansions
   Sources used for this update (17)

   1. CNN — Global bond yields are surging. Here’s why it matters
   2. WSJ — Opinion | Let the Bond Market Speak
   3. Bloomberg.com — Short Squeeze in US Swaps, Options Shows ‘Bessent Put’ at Work
   4. The Washington Post — Wall Street Journal defends billionaire’s use of AI to write op-ed
   5. Axios — Treasury bonds are becoming less special
   6. Reuters — Explainer: Why the bond market may be resetting expectations about the US
   7. Financial Times — Scott Bessent’s bond intervention puts US Treasury on collision course with Fed
   8. Politico — ‘Dead in the water’: Why Bessent should fear the bond market
   9. Axios — Stanley Druckenmiller makes AI writing a billionaire flex
   10. The New York Times — Bessent Faces Credibility Test in Quest to Tame Markets
   11. WSJ — Opinion | Much Ado About Artificial Intelligence
   12. The Economist — America will regret Scott Bessent’s bond-market misadventures
   confidence 70%