Tough for Scott Bessent to win the war against bond vigilantes, says analyst

Franklin Templeton’s OCIO head says Treasury Secretary Scott Bessent’s plan to double debt buybacks may not offset the ongoing large U.S. budget deficit. With Washington still issuing substantial debt, market participants are likely to demand higher income/returns for holding Treasuries, creating potential upward pressure on yields and tightening demand at current rates.

Analysis

Franklin Templeton’s OCIO head says Treasury Secretary Scott Bessent’s plan to double debt buybacks may not offset the ongoing large U.S. budget deficit. With Washington still issuing substantial debt, market participants are likely to demand higher income/returns for holding Treasuries, creating potential upward pressure on yields and tightening demand at current rates.