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How Scott Bessent Used Financial Engineering
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The T-bills offer Washington, now, a rare opportunity to borrow money for the cheap.
At the time of writing, the three-month bill yielded around 3.8%, while the 10-year Treasury yield sat around 4.6%, and the 30-year at a multi-decade high above 5%.
So what Treasury Secretary Scott Bessent has done is lean unusually hard on the cheaper rate today to finance a roughly $2 trillion annual deficit.
That holds down reported borrowing costs but leaves the government more exposed to inflation and rising rates.