The bond market is signaling to Scott Bessent that financing the expanding US deficit will come at a higher cost. Yesterday, the US sold $25 billion of 30-year bonds at an interest rate of 5.216%, marking the highest rate in a quarter century for this maturity.

This auction followed a similar sale of 10-year bonds the previous day, which also saw the highest financing cost for that tenor since 2007. Despite these elevated rates, the demand for the 30-year bonds was described as decent, indicating that investors are still willing to lend to the US government, but at a premium.

The increasing cost of borrowing underscores the market's concern about the growing US deficit and its implications for future government financing. Bessent, as Treasury Secretary, faces the challenge of managing these rising interest expenses while seeking to fund national obligations.