Trump’s ‘top bond salesman’ is getting a reality check

September 10, 2026 — 12:12pm

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Wall Street brought “America’s top bond salesman” down a peg on Wednesday, reminding Donald Trump’s Treasury Secretary Scott Bessent that not even the US government can fight the bond market.

Bessent, who has claimed that title, last month announced plans for the US government to buy back $US2 billion ($2.8 billion) of longer-dated bonds. He subsequently doubled the target to $US4 billion and then, on Wednesday, raised the buyback, which is planned to happen on Thursday US time, to “up to $US6 billion.”

If the increase was supposed to impress the market and depress bond yields, it failed.

The yield on the benchmark 10-year bonds jumped from 4.79 per cent to 4.85 per cent. Apart from a brief moment in 2023, when the yield on the bonds almost hit 5 per cent, that’s the highest yield since 2007, before the global financial crisis.

Bessent’s buybacks are, he has said, designed to increase liquidity at the less liquid end of the market.

He’s also claimed the surge in bond yields this year – which started the same day that the Trump administration and Israel launched their attack of Iran – doesn’t “reflect the underlying fundamentals of the market.” The yield on the 10-year bonds was 3.94 per cent on February 27, the eve of the attacks.

The unpleasant reality for Bessent is that the rising yields in the market (two-year yields have jumped from 3.38 per cent on February 27 to 4.43 per cent and 30-year yields from 4.61 per cent to 5.29 per cent) in fact do reflect the fundamentals.

It’s not just the war in the Middle East and its impact on energy prices and America’s inflation rate that, at 3.4 per cent, remains well above the US Federal Reserve Board’s 2 per cent target.

As the year has progressed, bond investors have become increasingly focused on the actual underlying fundamentals: US government deficits and debt that have blown out at an accelerating rate.

The deficit is about 6 per cent of GDP and gross government debt just passed $US40 trillion within a $US32.5 trillion economy.

The ‘knife to a gunfight’ analogy doesn’t come anywhere........

© The Age