Secretary of the Treasury Scott Bessent addressed the Treasury Market Conference in New York, emphasizing the importance of a strong and resilient U.S. Treasury market for national economic stability and affordability.
Bessent began by acknowledging the significance of recent political changes, noting that “November 2024 marked an inflection point for the nation and its fiscal future. The American people had just elected President Trump to put the country on stronger financial footing. The previous Administration had run up the highest deficit in US history outside of a recession or wartime. As a result, inflation had skyrocketed to generational highs. Families watched their hard-earned savings melt away as prices of consumer goods climbed ever higher. Seeking a course correction, voters elected President Trump in a landslide. And they gave him a clear mandate: to Make America Affordable Again.”
He stated his commitment to improving affordability and restoring fiscal order, saying this goal motivated his move from the private sector into public service.
Bessent described his role as “the primary caretaker of the Treasury market,” explaining that robust Treasury markets are essential because yields set benchmark rates for loans, mortgages, stocks, and bonds across the economy. He said, “Treasuries are not only the bedrock of the global financial system but also the American Dream.” He linked lower Treasury borrowing costs with increased affordability for Americans seeking home loans or business financing.
According to Bessent, “The good news is, we are succeeding. The US Treasury market is more robust and more liquid than it’s ever been. The Treasury Department has made significant progress in increasing demand and expanding accessibility to US debt.” He reported that U.S. Treasuries have delivered total returns of 6 percent year-to-date—the best performance since 2020—and highlighted strong investor demand at auctions from both domestic and foreign investors.
Bessent contrasted U.S. performance with other developed bond markets where demand has weakened: “Other developed bond markets, by contrast, have had nowhere near the same success... But not the United States.”
He credited these results to current administration policies: “Suffice it to say, the Treasury market remains the deepest and most liquid market in the world—which is a testament to the efficacy of the Trump Administration’s economic policies.”
Discussing strategies for further strengthening markets, Bessent cited several initiatives:
- Expansion of the Treasury buyback program aimed at supporting liquidity.
- Support for reforms to bank capital requirements through adjustments to enhanced supplementary leverage ratio (eSLR).
- Backing efforts led by regulators like the SEC to expand central clearing in Treasury trading.
He emphasized maintaining a "Regular and Predictable" issuance framework as key for transparency and investor confidence: “Our guiding principle at the Treasury Department is to finance the government at least cost over time... And ‘Regular and Predictable’ issuance promotes transparency and investor confidence by giving market participants a clear, consistent auction schedule.”
Bessent noted evolving trends affecting demand for Treasuries—including growth in money market funds (now valued around $7.5 trillion) and stablecoins (valued around $300 billion), as well as increased bank participation following regulatory changes.
Looking ahead, he indicated no immediate plans to change coupon auction sizes due to strong existing demand but said flexibility would be maintained based on ongoing monitoring: “We will continue to monitor trends in investor demand... When and if time comes to make changes, we will be prepared.”
In closing remarks he stated: “I answered the call to serve because I wanted to help President Trump usher in a new era of Parallel Prosperity—a decade of economic expansion where Wall Street and Main Street grow together... Properly managing our nation’s debt is a solemn responsibility that will affect generations of Americans to come.”
Bessent concluded with: “Treasury is committed to safeguarding world’s benchmark for stability while ensuring that American people can borrow, build, and thrive... By keeping risk-free rate low and Treasury market strong, we are Making America Affordable Again.”
