On February 5th we heard the following from US Treasury Secretary:
“The president wants lower rates,” Bessent said in an interview with Larry Kudlow, “He and I are focused on the 10-year Treasury and what is the yield of that.”
Bessent has further stated:
“He wants lower rates. He is not calling for the Fed to lower rates,” Bessent said. Trump believes that “if we deregulate the economy, if we get this tax bill done, if we get energy down, then rates will take care of themselves and the dollar will take care of itself.”
“We cut the spending, we cut the size of government, we get more efficiency in government, and we’re going to go into a good interest rate cycle,” Bessent said.
Currently, the bond market is calling BS on the above.
IMO the only way the bond market will come down meaningfully is if and only if there is fiscal responsibility. At some point the government will understand what the bond market demands...until then we will stay higher for longer. I would not be surprised at all if the 10 year hits 5.3% this year.
A doubling of the move in the lower orange box should not surprise anyone....that puts the 10 year somewhere in the 5.4% range. IMO anywhere between 5.3 and 5.6 is certainly possible and maybe even probable.
“The president wants lower rates,” Bessent said in an interview with Larry Kudlow, “He and I are focused on the 10-year Treasury and what is the yield of that.”
Bessent has further stated:
“He wants lower rates. He is not calling for the Fed to lower rates,” Bessent said. Trump believes that “if we deregulate the economy, if we get this tax bill done, if we get energy down, then rates will take care of themselves and the dollar will take care of itself.”
“We cut the spending, we cut the size of government, we get more efficiency in government, and we’re going to go into a good interest rate cycle,” Bessent said.
Currently, the bond market is calling BS on the above.
IMO the only way the bond market will come down meaningfully is if and only if there is fiscal responsibility. At some point the government will understand what the bond market demands...until then we will stay higher for longer. I would not be surprised at all if the 10 year hits 5.3% this year.
A doubling of the move in the lower orange box should not surprise anyone....that puts the 10 year somewhere in the 5.4% range. IMO anywhere between 5.3 and 5.6 is certainly possible and maybe even probable.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.