Was the Bessent Bounce a One-Day Wonder?

The "Bessent Bounce" fades after Trump reiterates his tariff plans...

Highlights

• The "Bessent Bounce" fades after Trump reiterates his tariff plans...

• ... with the Mexican peso and the Canadian dollar feeling the brunt of it

• The macro data are not consistent with 3% real GDP growth

• Tight corporate credit spreads are not reflecting the rise in default risks

Key Takeaways

Bessent Stops Treasury Selloff

• All it took for the Trump selloff in the Treasury market to stop was the nomination of Scott Bessent as Treasury Secretary. This comes right as the 50-day moving average in the 10-year yield crosses above the 100-day trendline. I don’t want to sound any alarm bells or ruin today’s party, but I must acknowledge as a nervous bond bull that the last five times this technical condition occurred in the past four years, it didn’t end too well. I’d love to chase this thing but will resist the temptation for now.