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The Japan Times
Bessent has no easy fix for what’s really driving yields up
Treasury Secretary Scott Bessent has enacted a new approach to tackle rising bond yields by initiating buybacks of long-term U.S. debt while selling more short-dated securities. This strategy, referred to as a 'Treasury twist,' recalls a federal maneuver from the 1960s aimed at manipulating yields. Although initial reactions saw long-term yields drop, they swiftly returned to high levels, questioning the efficacy of Bessent's plans to realign yields with equilibrium levels.
MonitorConfidence: MediumShort term horizon
Published 24 Aug 2026, 00:45 UTC1 min read
Visit original article ↗Lead image — The Japan Times
Summary
TL;DR
- Bessent introduces a strategy reminiscent of 1960s Fed policies to lower yields.
- Long-term U.S. yields initially dropped but quickly rebounded.
- The 10-year benchmark yield closed near its highest since Bessent's appointment.
- Bessent criticized predecessor's approach before introducing his own.
- The market reaction raises questions about the strategy's effectiveness.
Interesting facts
- The term 'Treasury twist' is a nod to historical Federal Reserve strategies.
- Long-term yields reaching the highest level in years highlights market volatility.
- Bessent's approach may reflect broader economic challenges faced by the Treasury.