{"text":[[{"start":9.28,"text":"Scott Bessent’s bid to steady the $32tn US government debt market has backfired, with investors warning that the Treasury secretary’s opening shot was too timid to halt a surge in yields and instead dented his credibility."}],[{"start":23.84,"text":"The 10-year Treasury yield, a benchmark for trillions of dollars in assets worldwide, has leapt this week to the highest level in nearly three years and is on the verge of the 5 per cent line that is viewed as a worrisome threshold on Wall Street."}],[{"start":38.24,"text":"The latest rise in borrowing costs has come even after the Treasury launched a $6bn bond-buying programme that Bessent upsized to beat back what he described as a “fever” in the world’s most important market. The intervention has instead stirred fears that America — the anchor of global finance — is acting in a way more commonly associated with weaker borrowers."}],[{"start":59.4,"text":"“We can’t ignore the fact that there are emerging-market-type risks in some of the actions the US has been taking,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management and a member of the Treasury Borrowing Advisory Committee, which advises the government on bond issuance."}],[{"start":76.16,"text":"“We typically haven’t seen interventionist policies coming out of the US. Or when we have, it has been a formal, institutionalised process.”"}],[{"start":85.4,"text":"The Treasury buyback operation, which shocked investors when it was announced in August, comes after an intervention to prop up the Japanese yen."}],[{"start":93.24,"text":"This week’s rise in borrowing costs has been fuelled by an abrupt rally in oil prices, which soared on Thursday as the US and Iran’s battle over the Strait of Hormuz has escalated and attacks by Tehran-backed Houthi rebels have posed a growing threat to supplies from the region."}],[{"start":109.04,"text":"The yield on 10-year Treasuries rose to as high as 4.97 per cent during trading in Asia on Friday while Brent crude was trading at about $107.70 a barrel, down slightly from earlier highs of above $109."}],[{"start":123.241,"text":"US President Donald Trump also signalled this week that his war in Iran and high energy costs could continue past the November midterm elections."}],[{"start":133.4,"text":"The jump in energy prices from the Iran war has combined with concerns over record sovereign borrowing and a flood of supply from tech companies to drive up global yields."}],[{"start":144.1,"text":"Concerns about the US public finances, after the country’s debt topped $40tn last month, deepened on Thursday after Trump promised a $5,000 payment to all American adults if Republicans won the midterm elections, at a cost of more than $1tn. Expectations that AI will prompt strong economic growth have also been a driver."}],[{"start":165.4,"text":"But fund managers said the 0.18 percentage point rise in the 10-year Treasury yield since the start of the week had also shown that Bessent’s buyback operation was too feeble to keep a lid on borrowing costs."}],[{"start":177.78,"text":"The Treasury had said on Wednesday that it would purchase a maximum of $6bn in debt in its first buyback, compared to the “at least” $4bn promised in mid-August when it announced the move. But some banks and investors expected a larger operation. The Treasury announced on Thursday that it had only accepted $5.2bn in offers from investors to sell bonds."}],[{"start":201,"text":"Vincent Mortier, group chief investment officer at Amundi, said the small size of the intervention meant it “does not solve the broader challenge” of rising US yields, and added that Bessent’s signalling to markets through the buybacks move could prove counter-productive as it was “showing some nervousness” on the part of the US government."}],[{"start":220.2,"text":"Asked about investor misgivings over the buyback operation, a senior Treasury official pointed to an “exceptionally strong” 30-year debt auction also held on Thursday."}],[{"start":229.68,"text":"The official said primary dealers — big banks that are responsible for absorbing any supply not bought by investors — had purchased the smallest portion on record for this type of bond while the bid-to-cover ratio, a measure of demand, was the third highest in the past five years."}],[{"start":245.84,"text":"The buyback action has formed part of an increasingly activist approach by the hedge fund manager-turned-Treasury secretary, including an intervention to support the yen against the euro in late July that blindsided the European Central Bank. Bessent warned the market this week not to bet against him on the yen, telling investors “I am the house”."}],[{"start":264.84,"text":"The market’s disappointment on the buyback programme stemmed from the Treasury appearing to “do things on the cheap, almost nickel and diming . . . which is inconsistent with a ‘whatever it takes’ approach”, said Mark Cabana, head of US rates strategy at Bank of America."}],[{"start":279.48,"text":"“If you’re going to intervene, you should care more about moving the market in a certain direction or hitting a certain level than the price you’re willing to pay,” he added. “You can’t have it both ways.”"}],[{"start":290.84,"text":"Some investors said Bessent’s intervention, while surprising, amounted to far too little to stem the tide of rising yields being driven by concerns about America’s widening deficit and simmering inflation."}],[{"start":302.68,"text":"“I would have thought Bessent would have understood that with any intervention your first shot is your best shot and you have to come in big,” said Bill Campbell, a portfolio manager at DoubleLine."}],[{"start":313.28,"text":"Additional reporting by Myles McCormick in Washington"}],[{"start":320.74,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789115082_6806.mp3"}