Analyst: US Treasury Secretary Bessent needs to do more to convince the market that fiscal issues are being taken seriously

Odaily News The bond market's message to Treasury Secretary Bessent in recent days is that you can't just sweep the $40 trillion U.S. Treasury market under the rug and pretend nothing is wrong. Bessent has announced plans to scale up long-dated Treasury buybacks this autumn, pledged to deploy the Treasury's vast "toolkit" to support the market, and discussed upcoming new measures to curb the nation's swelling debt burden. John Arnold, a former Enron energy trader, billionaire, and founder of the philanthropic Arnold Ventures, said the bond market turmoil this summer could ultimately prove to be "just another quickly fading episode," but the bigger concern is that the lack of change in the U.S. fiscal position will persist until it eventually triggers a crisis.

Tracy Chen, portfolio manager at Brandywine Global, said she feels very anxious because Bessent has failed to contain long-term Treasury yields. The bond market's performance shows that bond vigilantes still do not trust him. Bessent needs to do more to convince investors that the Trump administration is taking U.S. fiscal issues seriously, but talking about raising revenue through tax hikes or austerity before the November midterm elections would be unpopular. (Jin10)