Bessent, Trump administration are pushing bond market as key to affordability agenda

• Bessent, who said "my job is to be the nation's top bond salesman," used the occasion to blast the "negative rhetoric and doomsaying of market pundits, especially this spring" when Treasury securities and the dollar sold off.

What they're saying: "Maintaining a robust Treasury market — and strengthening it even further — is essential to Making America Affordable Again," Bessent said in a speech at the New York Fed's annual Treasury Market conference.

• He said the "bond market is more robust and more liquid than it's ever been."

The intrigue: Bessent, at his third appearance at a Fed conference this year, said Treasury yields were "a strong barometer for measuring success."

• "Lower Treasury borrowing costs mean lower corporate borrowing costs, lower mortgage rates, and lower car payments — which all translates to greater affordability for all Americans," Bessent said.

By the numbers: Bond yields are notably lower relative to the year's highs.

• The 10-year U.S. Treasury bond yield was 4.07% as of Wednesday morning, well below the most recent peak of 4.6% in May. That month saw a dramatic jump in long-term rates amid fiscal jitters, as President Trump's tax cut and spending bill made its way through Congress.
• The 30-year topped 5% in mid-May before falling back in recent months. As of Wednesday morning, the yield was 4.7%.

What to watch: Bessent has pushed looser financial regulations as a way to juice banks' demand for bonds, including a tweak to a rule that limits how much banks can borrow relative to their capital.

• A proposal to do just that was introduced by the Fed's top bank cop, Michelle Bowman, who Trump elevated to that role earlier this year.
• "[W]e are witnessing increased demand from banks as they shake off the excessive oversight that held them back," Bessent said.

Zoom in: Bessent said wider adoption of stablecoins would also increase demand for short-term debt, as issuers invest funds in Treasury bills.

• He said that the market, now around $300 billion, could grow tenfold by the end of the decade.
• "As money market funds and stablecoins grow, so too will the demand for Treasury bills," Bessent said.

The big picture: Global investors had shunned U.S. assets in the aftermath of "Liberation Day," selling the U.S. dollar and debt during a period of volatility — a phenomenon that raised questions about whether America was still the world's safe haven.

• But Bessent said that there continued to be "robust demand at Treasury auctions from a wide range of investors."
• "For the past ten months, the press has been pushing a 'Sell America' narrative. But the data and the price action have been saying the opposite: 'Buy America.'"

The bottom line: Trump policy, and global investors' new skittishness around huge deficits, have spooked bond markets in recent months.

• But the White House believes a wave of new demand for America's debt will keep a lid on interest rates.