Bessent Explains Trump. It Won't Be the Last Time
At least their economic strategy on the 10-year yield takes the focus off the Fed.
Bessent and Trump set a difficult agenda.
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Amid all the Trump 2.0 excitement, his Treasury secretary, the highly respected hedge-fund manager Scott Bessent, has enunciated a clear economic target that he shares with the president. “He and I are focused on the 10-year Treasury,” he said in an interview with Fox Business. “He is not calling for the Fed to lower rates.”
This makes sense as the 10-year benchmark is the most important rate in the entire global economy, and elected politicians should keep their hands off an independent central bank. The problem is that nobody controls the Treasury yield — it’s set by one of the world’s biggest and most liquid markets. In the years before the Global Financial Crisis, Alan Greenspan’s Federal Reserve famously tried to push up the 10-year yield and couldn’t. It became known as the conundrum. To keep yields down, central banks and governments can buy industrial quantities of bonds — the dreaded quantitative easing, a policy that amplified inequality to excruciating levels and that nobody wants to repeat.