Treasury Secretary Scott Bessent is hitting a brick wall trying to convince Wall Street and Main Street alike that President Trump’s economic policies are working.
According to Politico, no one is buying what Bessent is selling: costs remain higher than when Trump was reelected, interest rates show signs of rising rather than falling, and Wall Street analysts roll their eyes when he talks.
“Trump’s economic-approval rating has languished near historic lows for months amid frustration with cost-of-living issues that are central to the midterm elections,” Politico is reporting. “Now, the surge in yields on long-term government debt — a global trend that’s being driven by growing deficits, an artificial intelligence investment boom and rising energy costs due to the Iran war — threatens to stoke that anger by pushing up rates even more on mortgages and consumer loans.”
All of that mess has landed in Bessent’s lap.
Bessent calls himself the nation’s “leading bond salesman,” but his efforts to bring long-term yields in line haven’t calmed Wall Street’s broader inflation “jitters,” raising the odds the Federal Reserve lifts short-term borrowing costs. That turmoil could “further derail the GOP’s bid to hold onto its congressional majorities in November.”
“It’s certainly a political problem,” said Ed Yardeni, president and chief investment strategist at Yardeni Research, told Politico “And Bessent’s holding the hot potato.”
“Clearly not an advantage for us,” Rep. Pete Sessions (R-TX) told Politico when asked about higher interest rates. “The war has not been helpful to the price of gasoline, nor a number of other factors. So, are [voters] going to hold us accountable? I think it’s entirely possible that that could be a factor that is not in our advantage.”
Bessent “surprised markets” last month with a new bond-buying plan aimed at pushing down long-term borrowing costs, hinting he has a “big toolkit” for future challenges, according to the report.
But Wall Street heavyweights — including his former boss, Stanley Druckenmiller, who called a related $4 billion buyback plan “a subsidy to procrastination” — warn “further intervention” could undermine confidence in U.S. markets.
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