Why the White House's Push to Control Bond Markets Is Destined to Disappoint Investors
The administration can't fight the bond market forever.
Overview
With enough gumption, the White House and the Treasury Department can try to nudge the bond market in its preferred direction. In August, the Treasury said it would at least double its long-bond buybacks to $4 billion or more each through Nov. 4. Partially in response to that, the yield on the 10-year Treasury note shot upwards, and as of Sept. 18, it's at 5%. That's up from just below 4% before another driver of higher yields, the Iran war, was initiated by the U.S. and Israel in late February.
Treasury Secretary Scott Bessent is trying to fight the tide by buying back debt to keep yields lower. There's no way that this strategy could work for long, and it'll lead to disappointing outcomes for some investors who are hoping for bond yields to decline. Here's why.
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Originally published at www.fool.com.