The bond market does seem to have an irritating habit of asking policymakers to put their money where their mouth is.
Bessent’s “whatever it takes” moment appears to have bought him roughly the market equivalent of a long weekend before yields wandered back to see whether he actually meant it. And now we have larger buybacks, accompanied by the wonderfully candid admission that “part of it is signalling.”
One suspects Mr Market’s response may be: Splendid. Signal away. Now show us the money.
For someone who was on the winning side when the market tested the Bank of England’s resolve in 1992, Bessent must appreciate the irony better than most. You can announce where you think yields ought to be; persuading the bond market to agree is an altogether more expensive hobby.
The really interesting bit, as you point out, is that gold and Bitcoin haven’t politely returned to their starting positions. Perhaps the market is beginning to wonder whether the cure for high yields might ultimately prove more interesting than the disease.
Have a good weekend — I suspect Mr Market has not finished testing the Treasury’s resolve just yet.
Very good analysis, André.
The bond market does seem to have an irritating habit of asking policymakers to put their money where their mouth is.
Bessent’s “whatever it takes” moment appears to have bought him roughly the market equivalent of a long weekend before yields wandered back to see whether he actually meant it. And now we have larger buybacks, accompanied by the wonderfully candid admission that “part of it is signalling.”
One suspects Mr Market’s response may be: Splendid. Signal away. Now show us the money.
For someone who was on the winning side when the market tested the Bank of England’s resolve in 1992, Bessent must appreciate the irony better than most. You can announce where you think yields ought to be; persuading the bond market to agree is an altogether more expensive hobby.
The really interesting bit, as you point out, is that gold and Bitcoin haven’t politely returned to their starting positions. Perhaps the market is beginning to wonder whether the cure for high yields might ultimately prove more interesting than the disease.
Have a good weekend — I suspect Mr Market has not finished testing the Treasury’s resolve just yet.