Scott Bessent’s bid to steady the $32tn US government debt market has backfired, with investors warning that the Treasury secretary’s opening shot was too timid to halt a surge in yields and instead dented his credibility. The 10-year Treasury yield, a benchmark for trillions of dollars in assets worldwide, has leapt this week to the highest level in nearly three years and is on the verge of the 5 per cent line that is viewed as a worrisome threshold on Wall Street. The latest rise in borrowing costs has come even after the Treasury launched a $6bn bond-buying programme that Bessent upsized to beat back what he described as a “fever” in the world’s most important market.

The intervention has instead stirred fears that America — the anchor of global finance — is acting in a way more commonly associated with weaker borrowers. “We can’t ignore the fact that there are emerging-market-type risks in some of the actions the US has been taking,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management and a member of the Treasury Borrowing Advisory Committee, which advises the government on bond issuance. “We typically haven’t seen interventionist policies coming out of the US. Or when we have, it has been a formal, institutionalised process.