NEW YORK / LONDON (IT BOLTWISE) – The Trump administration is increasingly relying on the US bond market to advance its affordability agenda. Finance Minister Bessent emphasizes the strength of the market and criticizes negative voices that advocate the sale of US government bonds.
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The Trump administration has positioned the U.S. bond market as a central plank of its affordability agenda. Finance Minister Bessent, who describes himself as the nation’s top bond seller, emphasized the importance of a robust bond market in a speech. He criticized the negative voices that advocated the sale of US government bonds and the dollar in the spring.
Bessent explained that a strong bond market is critical to making America affordable again. He emphasized that the US Treasury bond market is more robust and liquid than ever before. Lower bond rates would lead to lower corporate financing costs, mortgage rates and auto loans, ultimately increasing affordability for all Americans.
Bond yields have fallen significantly from the highs of the year. The 10-year U.S. Treasury rate was last at 4.07%, well below the recent peak of 4.6% in May. This month, long-term interest rates rose on fiscal uncertainty as President Trump’s tax and spending bill passed Congress.
Bessent has also proposed looser financial regulations to increase banks’ demand for bonds. A corresponding rule change was proposed by the Fed under Michelle Bowman, who was appointed to her position by Trump. Bessent also sees broader adoption of stablecoins as an opportunity to increase demand for short-term debt securities.
Global investors had shunned US assets after the so-called ‘Liberation Day’, raising questions about whether the US is still considered a safe haven. However, Bessent emphasized that there is still strong demand for US Treasury auctions. The Trump administration believes a new wave of demand for U.S. debt will keep interest rates low.
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