US bond yields retreated from 2002 highs as oil prices dipped below $100 a barrel. Treasury Secretary Scott Bessent insisted at a Pennsylvania fireside chat that government debt can be tamed through growth and spending restraints, saying the curve would start "bending." Yields on the 10-year and 30-year fell to 5.27% and 5.63%, while two-year yields were little changed. Crude prices slipped on increased supplies through the Strait of Hormuz.
However, investors met Bessent's remarks with skepticism, citing a 6% deficit and lack of concrete plans. Bridgewater Associates founder Ray Dalio warned the US is approaching limits of its debt cycle, potentially facing a crisis within three years if spending outpaces revenue. He noted Treasuries are vulnerable to reduced demand from China and Japan.
Meanwhile, HSBC strategists maintained a wager on the gap between five- and 30-year Treasury yields moving wider amid persistent volatility.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing