Scott Bessent had China to think about this week, and there is plenty to mull over in that relationship, but his mind may have been elsewhere. The Treasury Secretary met Vice Premier He Lifeng ahead of Donald Trump’s summit with Xi Jinping, trade and technology top of the agenda. Bessent has been a key figure in negotiations with Beijing, assured and at times uncompromising.
He holds a wealth of market experience, specifically investment management, with expertise in currencies and fixed income. Britons who recall "Black Wednesday," in which Bessent’s group made a $1 billion fortune, still curse his name. But, amid the China focus this week, Bessent has had another summit to worry about.
Well, more of a peak, and one that shows up on the kind of financial chart very familiar to Bessent. The 10-year Treasury yield touched 5.225 percent on Thursday, its highest point in roughly 19 years, before easing slightly. Bessent, once a master of these markets, is now struggling to best them from the other side.
Bessent founded Key Square Capital, a global macro hedge fund, after serving as chief investment officer at Soros Fund Management. The Treasury job fits Bessent’s expertise but reverses his position. At a hedge fund, he could take or unwind a position.
As secretary, he must sell debt whether the market’s price is welcome or not. As an investor, Bessent could choose the trade. As Treasury secretary, he is the trade.
Last fall, Bessent described his job as the nation’s "top bond salesman," pointing to Treasury yields as a measure of success. "By this metric, we are making substantial progress in keeping rates down following the spending blowout from the Biden years," Bessent said at the time. Treasury market has been the best-performing developed bond market this year.
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