Treasury's Twist Tests Warsh's Fed Credibility
TL;DR
Treasury Secretary Scott Bessent signaled an activist market move to lower long-term debt costs by buying long-term bonds and financing the purchases with short-term T-bills, a plan to twist the yield curve. Analysts say the move undercuts Fed Chair Kevin Warsh's credibility and the Fed's independence, raising concerns about fiscal dominance and potentially higher borrowing costs for taxpayers despite some near-term yield relief.
- Here’s how Bessent’s newly activist Treasury Department is undercutting the Fed’s Warsh MarketWatch
- Bessent's bond gambit aimed at calming markets is instead stirring inflation worries CNBC
- Treasury Is Buying Its Own Bonds. Where Is The Money Coming From? Forbes
- Morning Bid: So much for the Bessent bid Reuters
- Bessent’s Bond Maneuvers Giving Global Debasement Trade New Life Bloomberg.com
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