Analyst: Bessent needs to "do more" to make the market believe that the U.S. government is taking fiscal issues seriously

The signals sent by the bond market to Treasury Secretary Basant in recent days indicate that one cannot simply sweep the $40 trillion U.S. national debt under the rug and pretend nothing is wrong. Basant announced plans to increase the scale of long-term Treasury buybacks this fall, promising to utilize the Treasury's vast "toolbox" to support the market, and mentioned upcoming measures to curb the ever-expanding U.S. debt burden.

John Arnold, former Enron energy trader, billionaire, and founder of the Arnold Ventures charity, stated that the turmoil in the bond market this summer may ultimately just be "another quickly settled episode," but the greater concern is that the lack of change in the U.S. fiscal situation will persist until it ultimately triggers a crisis.

Tracy Chen, global portfolio manager at Brandywine Global, expressed that she feels very anxious because Basant has failed to rein in long-term Treasury yields. The performance of the bond market indicates that bond vigilantes still do not trust him. Basant needs to do more to convince investors that the Trump administration is taking U.S. fiscal issues seriously, but discussing tax increases or austerity measures to boost revenue before the midterm elections in November will be unpopular.