US Treasury Secretary Scott Bessent's Visions for Longer-Term Debt Sales
Bessent says boosting longer-term Treasuries in government debt issuance is some ways off, citing elevated inflation and the Federal Reserve’s quantitative tightening program as hurdles. Any move to increase longer-term debt sales would be "path dependent" on market conditions and inflation rates. The Fed's current shrinkage of its holdings of Treasuries may also impact the demand for longer-term debt.
- Elevated inflation expectations and the Fed's monetary policy could have far-reaching implications for bond yields, as investors increasingly seek safer havens in low-yielding assets.
- Will the US Treasury Department prioritize yield-to-maturity or price stability when setting interest rate policies, potentially influencing the trajectory of longer-term debt sales?