Bessent announces fiscal consolidation initiative from President Trump to be revealed end of week or early next week.
“We are the announcing probably at the end of this week, beginning of next week, an increased focus on fiscal consolidation. And, you know, it's the coming from president Trump.”
Bessent identifies three factors driving Treasury yields higher: fiscal deficits, potential Fed rate increases, and tech company bond issuance competing with government debt.
“The fiscal outlook, a Fed considering a rate hike, and hyperscaler issuance crowding out demand for Treasuries all point the same way,”
A genuine fiscal reform plan would lower long-term yields far more effectively than any buyback program.
“A credible fiscal package would do more for the long end of the curve than a buyback program 1,000 times this size.”