Bessent Says He Knows Something Bond Market Doesn’t
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NEW YORK (AP) — The bond market is one of the few forces in the world strong enough to get politicians to snap to attention. It also helps dictate how much ordinary people have to pay on their mortgages and car loans, as well as how much they earn from their savings accounts and 401 (k) plans.
NEW YORK (AP) — U.S. stocks are rising Friday and trimming their losses from what’s been a shaky week. The bond market, which has been the center of Wall Street’s action, remains jumpy, but yields are not moving as much as earlier in the week and are helping to keep financial markets relatively calm.
Treasury Secretary Scott Bessent’s plan to calm markets is being short-circuited.
Part of the problem is the size of the national debt, which on Tuesday hit a new high of $40 trillion. The Trump administration not only has not put forward a plan for reducing borrowing, it has pushed through major economic policies that have helped make the situation worse.
It has been a bruising week, with investors’ fears about the war in Iran, government deficits, the state of the economy and a deluge of A.I. debt coming to a head. This confluence hit the bond market particularly hard, although signs of stress could also be seen in stocks, currencies and commodities.
Shares are mostly higher in Asia, with South Korea’s benchmark Kospi rebounding more than 6%. U.S. futures also were trading higher early Thursday after the U.S.
While stocks have performed better than bonds in the long run, stocks are also more volatile and can experience more dramatic losses than bonds. These price swings can rattle investors and cause them to exit positions early. Bonds are typically more stable than stocks during economic uncertainty.
The yield on the 30-year Treasury this week hit its highest level since 2007, a rise that could put upward pressure on borrowing costs.
In early trading, the 10-year Treasury bond yield rose as high as 4.71%, its highest level since Tuesday. The 30-year yield spiked to as high as 5.627%, rising just above the level yields were at when the Treasury Department’s action Wednesday.