“A global bond sell-off pushed 10-year Treasury yields close to the significant 5% mark, approaching their highest level in almost two decades as the Iran War and U.S. trade policies combined to stoke inflationary fears,” Semafor reports.

“The increase in Treasury yields triggered a sell-off of Asian and Australian bonds, appearing to confirm that U.S. Treasury Secretary Scott Bessent’s attempt to steady the government debt market had backfired.”

Bloomberg: U.S. yields surge, calling Bessent’s bluff.

“A monthslong selloff in government bonds is skidding into dangerous ground, pushing borrowing costs toward levels that some fear will finally damage the stock market and the economy,” the Wall Street Journal reports.

“Yields on U.S. Treasurys, which rise when bond prices fall, surged anew on Thursday, lifted by a new jump in oil prices, a firm wholesale inflation report and President Trump’s promise to send $5,000 checks to Americans if Republicans keep control of Congress—a pledge that would add more than $1 trillion to the federal deficit.”

“The Treasury Department failed to cow the bond market Wednesday with its amped-up buyback announcement, as rates still rose,” Axios reports.

“The reaction suggests that Treasury Secretary Scott Bessent’s unusual showdown with the markets could itself add to upward pressure on interest rates — precisely the opposite of what most think he’s trying to achieve.”

“In a Virginia law school classroom, students are grappling with an event once considered unimaginable: a U.S. government debt default,” Axios reports.

“This semester’s class is indicative of a nervousness that has become more widespread about America’s standing in the global financial system.”

“Central bankers’ great fear is that we’re entering a new era of ‘fiscal dominance,’ in which the money supply is being managed not to achieve low and stable inflation, but to help elected politicians avoid hard choices around taxes and spending,” Axios reports.

“It comes as inflation has already been elevated in much of the world for years and as longer-term interest rates are climbing.”

“At the same time, elected governments are under intense political pressure not to enact the tax increases or public benefit cuts that would improve their debt outlooks.”

“With markets wobbling and the world watching, Federal Reserve chairman Kevin Warsh went back to basics yesterday morning: He affirmed that the Fed is determined to get inflation down and may have to raise interest rates to accomplish it,” Axios reports.

“If the Warsh Fed follows through with rate hikes, it would increase borrowing costs for Americans and potentially put him in the crosshairs of the rate-cut loving president who appointed him.”

“Kevin M. Warsh, the chairman of the Federal Reserve, sought to alleviate concerns about his commitment to taming elevated inflation in a closely-watched speech on Friday,” the New York Times reports.

“Mr. Warsh, delivering his first address to the world’s leading economic policymakers at the Fed’s annual conference in Jackson, Wyo. affirmed that the central bank is chiefly focusing on getting inflation down after half a decade of it overshooting the Fed’s 2 percent target.”

“The Fed would not waver on that goal, Mr. Warsh said, although he stopped short of saying whether the current moment required higher interest rates.”

“A baseline assumption in asset allocation, regulatory policy and international finance has long been that U.S. Treasury securities are risk-free assets that offer protection against the vagaries of economic fortune. It may no longer be valid,” Axios reports.

“That’s the cold reality that lurks beneath the rise in longer-term bond yields in recent weeks that triggered a Treasury Department intervention.”

“It implies a world where the U.S. government can’t count on favorable borrowing conditions as a matter of course.”

The Guardian: The treasury bond mess: is this the demise of the U.S. as a safe haven?