Scott Bessent, Secretary of the Treasury, addressed the Treasury Market Conference in New York, focusing on efforts to strengthen the U.S. Treasury market and its impact on affordability for Americans. In his remarks, Bessent acknowledged the New York Federal Reserve for hosting the event and highlighted recent changes since November 2024, when President Trump was elected.
Bessent criticized the previous administration for running up high deficits outside of recession or wartime, leading to increased inflation and reduced purchasing power for American families. He stated that voters chose President Trump with a mandate “to Make America Affordable Again,” motivating Bessent’s move from the private sector into public service.
He emphasized the central role of Treasury yields in setting borrowing costs across various sectors: “Treasuries are not only the bedrock of the global financial system but also the American Dream. Treasury yields have a trickle-down effect on the broader economy that determines whether a young family can afford a home, a college student can buy a car, or an entrepreneur can get a small business loan.”
Bessent reported positive developments in 2025: “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 noted that total returns year-to-date reached 6 percent—the best performance since 2020—and borrowing costs had decreased across maturities.
He contrasted this with other developed bond markets where demand has declined. “We continue to see robust demand at Treasury auctions from a wide range of investors, including foreign investors whose holdings of Treasury securities are at record levels,” he said.
Addressing concerns about market volatility and resilience, Bessent outlined several initiatives:
– Expansion of the Treasury buyback program to support liquidity.
– Support for reforms to the enhanced supplementary leverage ratio (eSLR) to avoid distorting banks’ incentives regarding low-risk activities like Treasury intermediation.
– Endorsement of expanded central clearing led by the SEC to improve risk management and competition among counterparties.
He reiterated commitment to maintaining what he called “Regular and Predictable” issuance—a framework adopted in response to rising federal debt burdens since the late 1970s—which supports transparency, investor confidence, limits rollover risk, reduces supply uncertainty, and reinforces Treasuries as global benchmarks.
Bessent discussed adapting issuance strategies based on trends such as growth in money market funds (now valued at about $7.5 trillion) and stablecoins (valued around $300 billion), both significant buyers of short-term government debt. He said these factors would influence future decisions: “If our borrowing outlook changes, so will the amount we issue.”
Looking ahead, Bessent signaled no expected changes in coupon auction sizes over coming quarters due to strong demand and current financing capacity. He referenced deficit reduction measures and actions by the Federal Open Market Committee (FOMC) as providing additional flexibility.
In closing his remarks, Bessent reaffirmed his commitment: “Properly managing our nation’s debt is a solemn responsibility that will affect generations of Americans to come… By keeping the risk-free rate low and the Treasury market strong, we are Making America Affordable Again.”
