Market Perspectives
Last week the argument was that the Fed had stopped being the problem and the bond market had taken over. This week the Treasury tried to take it back. Bessent doubled the buyback of long-dated debt on Wednesday, said on Thursday he would go further if needed, and the yield relief was erased inside a session. Federal debt passed $40 trillion in the same week. Equities took their first weekly loss in four: the S&P 500 fell 1.82% to 7,674.37 and the Nasdaq 2.45%, with the Russell 2000 down 2.44%, before a Friday bounce recovered part of it. Europe's STOXX Europe 600 slipped 0.6% to 653, held up by basic resources on the softer dollar and by luxury. What worked instead was the trade against all of it: gold to a record and bitcoin up 22%, its best week in more than two years.
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BONDS & MACROECONOMICS
The thirty-year hit a twenty-year high before the Treasury said it would at least double its liquidity-support buybacks of ten to thirty year paper, from $2bn to $4bn per operation. The relief rally was erased within a session; the ten-year finished at 4.73% and the thirty-year at 5.27%. Federal debt passed $40 trillion for the first time.
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