Dorothy

Market Snapshot Top Overnight News The US’s national debt has hit a record $40tn as borrowing rises at a historic pace, fuelling investor concerns about the state of America’s public finances despite Donald Trump’s vow to bring spending under control. FT Scott Bessent’s shock Treasury intervention reverberated through markets, with analysts warning his plan risks being a short-term “circuit breaker” at best. Underscoring jitters, long end US yields edged higher. Bessent is emerging as the most interventionist Treasury chief in decades. BBG The US will begin what Donald Trump called “unprecedented” economic warfare against Iran after failing to reach a deal. He gave no details but also threatened to target Iran’s trading partners. Brent rose above $93.

Admittedly, the increase in buybacks isn’t a particularly big amount relative to the number of outstanding Treasuries. But it offers a signal that officials are willing to support the long end, not least after the 30yr Treasury yield closed at a post-2007 high of 5.31% on Monday. So that led to a significant flattening of the yield curve yesterday, with the 2s30s slope (-8.5bps) also seeing its biggest daily decline in the last couple of months.

But he said given the size of outstanding Treasury debt, the increase in buybacks from the government was "unlikely to provide meaningful long-term relief".

THE MARKETS U.S. and Asian markets step up despite increased price of oil Traders in America and Asia appeared to welcome Bessent’s promised injection of new money into the bond markets. The S&P 500 rose yesterday, and futures were in a holding pattern this morning before the opening bell. The index remains near its all-time high in part because retail traders net bought $6.9 billion in stocks in the most recent week monitored by Arun Jain and his team at J.P. Morgan.

Treasury Secretary Scott Bessent’s plan to calm markets is being short-circuited

Treasury Secretary Scott Bessent insisted Thursday that he has multiple weapons at his disposal to quell liquidity problems in the government debt market and restore calm.

What is Bessent doing with the $32tn Treasury market — and will it work? US Treasury secretary has made a high-stakes bet he can beat back soaring borrowing costs

The Treasury Department said its intervention reflected its "desire to provide greater liquidity support" for longer-term bonds.

Experts say that bond yields have been spiking to highs not seen since the start of the Great Recession due to investor anxiety over a number of factors, including inflation, the size of the US government's debt, and Trump's illegal war with Iran.

A broad array of factors has pushed up yields, including persistent war-driven inflation fears, fiscal worries, potential monetary policy tightening, and competition from artificial intelligence-related corporate bonds.

Audio will be available later today. NPR's Leila Fadel speaks with Bloomberg's Stacey Vanek Smith about why the U.S. Treasury acted to push down long-term bond yields and how that relates to the ballooning U.S. debt.

Published Long-term borrowing costs in the US eased on Wednesday after the Treasury department announced it would buy back more debt.

The Treasury’s move comes just weeks after Fed Chairman Kevin Warsh had enthused over financial markets being freed of forward guidance. “Market participants are learning to play the ball, not the referee, and market prices will continue to respond in the direction and magnitude they see fit.”