The White House and the Market Are Telling Different Stories

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The political strategist James Carville once joked that if he ended up being reincarnated, he’d like to come back as the bond market.

“You can intimidate everybody,” he said.

Not Scott Bessent.

About a month ago, during a talk at Southern Methodist University, the Treasury secretary issued a challenge—both to the business-school students in the audience and to the traders of the world.

“I have asymmetric information.

I am the house now,” he said.

“You can bet against me if you want.” The line was an attempt to explain the government’s decision to boost the Japanese yen over the summer, but it was also a broader statement about his ability to influence markets and guard against financial downturns.

This past weekend, Bessent conceded that “the house doesn’t win every hand”—a sign that he’s been slightly chastened.

Emphasis on slightly : Although he admitted he “can’t control the bond market,” he maintained that the house still wins “over time.” The bond market’s behavior over the past month clearly called for an adjustment to his posture.

The interest rates on the 10-year Treasury (which dictates rates on certain consumer loans) and the 30-year Treasury (an important measure of how investors feel about the government’s ability to pay back its debts) are now the highest they’ve been since 2002.

The Trump administration’s market interventions, which have been ramping up in recent months, have had little effect on bond prices.

Bessent may continue to insist that he’s the “house,” but it’s clear at this point that the market isn’t listening.