During an appearance on "Mornings with Maria" on Fox Business Network, U.S. Treasury Secretary Scott Bessent addressed the recent disruptions in the bond market, attributing them to the struggles of certain highly leveraged players. He assured that the situation was not indicative of any systemic issues. Bessent also cautioned China amid the escalating trade tensions with the U.S., advising against currency devaluation and keeping all policy options on the table. He expressed disappointment over China's reluctance to engage in negotiations and emphasized the importance of adhering to fair trade practices.

Recent fluctuations in bond yields have sparked various speculations among strategists, with some attributing the surge to investors' quest for liquidity in a volatile market, while others believe it reflects growing confidence in the resilience of the U.S. economy against a potential recession. Bessent's efforts to lower borrowing costs as part of broader economic strategies, such as tax cuts and deregulation, are facing challenges as Treasury yields continue to rise, raising doubts about the safety of bonds as a refuge amidst the market turmoil caused by trade tensions.

Bessent dismissed the notion that China might be offloading large amounts of Treasuries currently, describing the current market situation as a routine deleveraging phase rather than a systemic problem. As leveraged players grapple with losses, risk managers are urging them to reduce their positions, leading to fluctuations in the bond market. Bessent projected that as leverage diminishes, the market will stabilize once again.