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"I am the house now": Bessent is Beating Bond Markets... for Now

NowPress play to follow along0:00 / 18:15
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Breakdown

0:10lesson

Bond market testing with geopolitical tensions

  • Testing bond market with vigor as week progresses
  • Yield suppression architecture since mid-August
  • Fed's interest rate hike tension with energy prices
  • War in US-Iran tensions driving oil prices
2:51lesson

Rate hike expectations remain stable

  • Rate hike odds still between 80-90%
  • Probability of two hikes by year-end at 40-50%
  • Market in digestion mode after hawkish speech
  • Crude oil surge not changing rate expectations
5:19lesson

Inflation expectations re-engage with bond buybacks

  • Crude oil surge driving inflation expectations
  • Break-even inflation rates revisiting February dynamics
  • US Treasury doubles bond buybacks to $4B
  • Bond market testing support levels
8:0210-year note· ticker

10-year note auction success

  • 10-year note auction at 4.834% yield
  • Bid-to-cover ratio 2.71
  • Dealers took down 4.3% of offer
  • Strong demand for bonds
10:30lesson

Bond market influence on inflation and FX

  • Flattening of 30-year to 10-year yield spread
  • Inflation expectations responding to bond market
  • Gold and dollar dynamics tied to bond yields
  • Bitcoin and silver influenced by yield suppression
13:11lesson

Market sentiment and upcoming data

  • Gold holds despite hot data
  • Dollar weaker against EUR
  • S&P and NASDAQ in consolidation
  • ECB rate decision and US PPI data upcoming
15:39lesson

Bond market positioning and asset allocation

  • Focus on yield suppression trade
  • Long gold, short dollar against major currencies
  • Long Bitcoin and silver through call verticals
  • Short risk via call verticals in Q's and SPY
18:12lesson

Macro Money wrap-up and future outlook

  • Macro Money returns tomorrow
  • Focus on yield suppression and macro calendar
  • Testing of 30-year bond demand
  • Market sentiment remains open question

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