Bessent takes control of the clown car and then flies to Tokyo, not because he likes the food. Bessent is the bond market’s control rod on the White House; it made Trump blink.
Japan is a key source of bond market instability, providing the borrowing medium of choice for some of the most leveraged market positions out there. All familiar territory for the new Treasury Secretary.
Having been at the crime scene when his old boss, George Soros, broke the Bank of England, Bessent is the key figure in helping the US escape this self-inflicted dilemma.
He's not Superman, but he's probably the market’s best hope right now.
My weekly chat with Gareth, always good fun:
This week, Jeremy and Gareth talk less about tariffs and more about their impact on capital markets - bonds in particular. Jeremy points out that the USA is now simultaneously experiencing a Brexit AND a "Liz Truss" moment - resulting in a falling dollar and rising rates. Keep an eye on those two and the price of gold. You have three metrics that give a dashboard of the current situation and the level of trust in the US administration.
While Trump's economic guns are all trained on China, Scott Bessent is on his way to Japan - a major owner and buyer of US treasuries. Remember the carry trade unwind panic of mid-last year?
Closer to home, we hope the UK is next on Bessent's list, with a trade deal in the offing. Small-cap news was from Nexus Infrastructure, Beeks and SDI Group. Big data next week includes China's GDP (required to be c.5%), UK inflation for March, US retail sales and hopefully a rate-cut from the European Central Bank.
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