🚨 THE US TREASURY IS ABOUT TO TAKE A HUGE GAMBLE WITH ITS DEBT.
Treasury Secretary Scott Bessent has been trying to bring down bond yields, but the market keeps moving against him.
In September, Bessent challenged bond traders, saying, "I am the house now" and "you can bet against me if you want."
He increased long term bond buybacks to as much as $6 BILLION, but investors were disappointed and yields continued rising.
Now the 10-year Treasury yield has reached 5.23%, while the 30-year has climbed above 5.6%, levels not seen in more than two decades.
And now Citi expects Bessent to take an even bigger step.
On November 4, the Treasury could announce $3 BILLION cuts to both 20-year and 30-year bond auctions, with the 20-year bond potentially canceled entirely.
Instead, the US would borrow more through short term Treasury bills to reduce the supply of long term bonds and potentially ease yields.
But there's a serious risk.
Short term debt needs to be refinanced much more frequently, meaning the government could face even bigger interest costs if rates remain elevated.
And with US national debt approaching $40 TRILLION, even small changes in borrowing costs can have enormous consequences.
The Treasury may be able to reduce pressure on long term yields, but it cannot make America's debt problem disappear
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