Treasury Secretary Scott Bessent's plan to buy back long-term US debt and sell more short-dated securities, which he called a 'Treasury twist,' briefly pushed down long-term yields before they climbed back up, with the 10-year benchmark closing the week at 4.73%, near its highest since he took office. Bessent said yields are out of whack with 'equilibrium' levels and blamed 'bad information' for the rise, while vowing to focus on Trump's fiscal-consolidation program. The move came two weeks after a tweak in Treasury's forward guidance on issuance, and analysts said it opened the door to potential cuts in sales of the longest-dated securities. Some market participants, including Edward Yardeni, said there was nothing out of whack to begin with, and JPMorgan's rates strategy desk reported that 'market functioning has improved notably this year.' Bessent's efforts also extend to influencing corporate issuance, as he suggested hyperscalers like Alphabet Inc. should issue more five-year 'belly debt' instead of long-term bonds, but analysts remain skeptical that the administration can materially reduce the deficit, which is forecast at around 6% of GDP this year.
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JPMorgan Chase & CoTreasury twist fails to keep long-term yields down; 10-year yield rises to 4.73%.
