Treasury Secretary Scott Bessent is discussing 10-year bond yields extensively. In speeches, in interviews, week after week, he emphasizes the administration’s plan to lower and maintain them.
Some of this is normal — keeping government borrowing costs in check has long been part of the job — but Bessent’s focus on the benchmark US note is so intense that he’s forced some on Wall Street to revise their predictions for 2025.
In the past couple of weeks, chief rates strategists at Barclays, Royal Bank of Canada, and Societe Generale have lowered their year-end forecasts for 10-year yields due in part to Bessent’s efforts to drive them lower. It’s not just the words he speaks, but also the concrete actions he can take like limiting the size of 10-year debt auctions or advocating for looser bank regulations to increase bond demand. The yields have already decreased by half a percentage point on the 10-year over the past two months.
That sharp move is less about Bessent and more about his boss, President Donald Trump, whose tariff and trade-war threats have caused investors to move from stocks to bonds in search of safety. A representative for the Treasury did not respond to a request for comment.
In a recent interview with Breitbart News, Bessent expressed confidence that budget cuts will significantly lower interest rates, leading to a revitalization of the private sector. In addition to spending cuts, lower taxes, and policies intended to reduce energy prices, are meant to boost economic output while controlling inflation.
“They’ve kind of capped yields,” said Subadra Rajappa, head of US rates strategy at SocGen. Speculation about a so-called Bessent put in the bond market has emerged, likening it to the famous Greenspan put.
Dhingra is advising his clients to buy 10-year inflation-linked notes, in part due to Bessent’s commitment to lowering long-term yields.
Bessent has revealed plans to keep sales of longer-term debt unchanged for the next several quarters. He has also supported a review of the Fed’s supplementary leverage ratio.
For Blake Gwinn, head of US rates strategy at RBC Capital Markets, it was both the likely negative impact from Trump’s tariff policies on growth as well as Bessent’s efforts to lower yields that led to a cut in his 10-year yield forecast. This story was originally featured on Fortune.com
