CJP: This is an excellent discussion of what’s going on in the bond markets right now: “On September 8, at Southern Methodist University, [US Treasury Secretary Scott Bessent] raised the stakes. ‘I am the house now,’ he said of the yen, telling traders they could ‘bet against me if you want’ because, in his words, ‘I have asymmetric information.’ Mohamed El-Erian noted on X that Bessent had described a ‘fever that was building’ in the bond market. Two days later a smaller-than-expected buyback sent yields to multi-year highs, and Bessent went on Bannon’s program to call the market healthy.
“Traders took the bet. When Bessent called himself the house, the yen stood near 154 to the dollar; on Friday it traded near 159. When he doubled the buybacks in August, the 30-year yield dipped to 5.19 percent; on September 24 it touched 5.48 percent. The buyback at which holders offered him more than twice what he would take was the market’s reply to the claim of asymmetric information. Bessent made his fortune at Soros Fund Management betting against central banks that believed they could hold a price against the market. He is now the official holding the price, and the market is doing to him what he once did to the Bank of England.”
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● “America’s Bond Market is Entering a Crisis With No Historical Parellel,” Josiah Waters, Substack, 9/25/26:
LINK: https://josiahwaters.substack.com/p/americas-bond-market-is-entering?r=5uhpf&utm_medium=ios
#economy #bonds #budgetdeficit #Yen #interestrates