Scott Bessent basically has the whole US government's debt strategy leaning on one bet: rates go down soon
been funding the government mostly with short term bills instead of locking in 30 year bonds right now. that only makes sense if you think long term rates are about to drop, otherwise why not just lock in and stop worrying about it
problem is rates aren't dropping. they're going up. 30 year auction this week priced at 5.22%, highest since 2001. 10 year went off at highest yield since 2007. market is charging way more than usual
and that whole yen intervention thing a few weeks back (the "we did it for Japan" thing) wasn't really about Japan. it was about keeping Japan from having to sell off a trillion dollars of US treasuries to defend their currency, bc that selling would push US rates even higher and blow up Bessent's bet even more
so it's not "is Bessent right that rates fall" in a vacuum, it's the government's entire funding strategy quietly betting on it, and right now the market is not agreeing with him
either he's early and this ages well, or the US just took a pretty expensive gamble with the national debt
So, I am also betting on rates go down.