Our President is completely illiterate when it comes to basic finance.
“These ridiculous interest rates, they’re ridiculous. Look, when our country is strong, interest rates should go down. When our country is weak, frankly they should go up. But this country is strong. They’ve never had, there’s never been in history the kind of money coming into a country as we have right now.”
QEInfinity accurately responds, “It’s a shame our President is completely illiterate when it comes to basic finance.”
Interest rates are a reflection of inflation, not military strength, not alleged money coming into the country.
Bessent Tries to Calm the Bond Market
Bessent Touts a Big Tool Kit
Please consider Treasury Secretary Scott Bessent Speaks with CNBC’s Sara Eisen on “Squawk on the Street”
Following is the unofficial transcript of a CNBC exclusive interview with U.S. Treasury Secretary Scott Bessent on CNBC’s “Squawk on the Street” (M-F, 9AM-12PM ET) today, Thursday, August 20.
SARA EISEN: Let’s start, though, with this bond move. Yields are rebounding today after the Treasury increased its buyback limit on longer-dated securities yesterday. And joining us now, in a CNBC exclusive interview, to discuss is Treasury Secretary Scott Bessent. Secretary Bessent, welcome back. It’s good to see you.
BESSENT: Yes, the, we’re trying to signal that we think that this is a thinly traded area of the market, that we’re in August, and there’s been a lot of corporate issuance that’s influenced the market. And we believe that there are many underlying factors in turn that the market is not looking at, and we are going to make a market the, in these. We routinely do buybacks, and we’re going to increase the size of the buyback. And, you know, Sara, I would note that it could be more than the $4 billion per issue.
EISEN: Yes, I was going to ask how big this could get. If the signal here is that you’re not happy with the direction of yields, you know, they have gone back the other way. We have erased most of the Treasury rally that you got yesterday with that big surprise. So how much more are you willing to do?
BESSENT: Well, again, we have a big toolkit, so we will see. And part of it is signaling here, and to show that we believe that the yields don’t reflect the underlying fundamentals. This Iran conflict, we will get on the other side of this. We don’t know when, and we can talk about the economic measures we’re going to be taking against Iran in a minute.
EISEN: Sure.
BESSENT: We believe that the liquidity, especially in the 30-year point, is very poor. And we are in the administration, we are, be announcing probably at the end of this week, beginning of next week an increased focus on fiscal consolidation. And it’s coming from President Trump. Russ Vought and myself will be examining both on the revenue side and the cost side what we can do.
EISEN: Yes, because that’s where I was going to go and where a lot of the analysis has focused, as you know, Mr. Secretary, which is strong signal from the administration on the buybacks, but the fundamentals are ultimately what is going to prevail here in the bond market. And the fundamentals are hard to ignore when it comes to the size of our debt, with public debt increasing to now $40 trillion.
BESSENT: Well, yes, I mean, look, Sara, there’s nothing magic about the $40 trillion number. And we can grow our way out of that. So, but what we do want to signal is, I think that there’s been a lot of misinformation in terms of what’s going on with the deficit, what’s going on with the deficit to GDP. … And one of the things that’s temporary here that’s influencing the deficit has been these tariff refunds. And we won’t have to do that again. And the, Ambassador Greer through the 301 process is reimplementing the same level of tariffs. And I would expect that our 2026 tariff income is going to be roughly what it was in ’25, and we’re going to be able to keep that in terms of the budget consolidation. The other big item in the budget that we’re seeing is the hit that we’re taking from, to revenues for the immediate expensing of factories and of equipment and farm structures. And I think that, if people sit back and think, that’s not government spending. That is actually an investment in the future and we’re increasing the tax base. And that’s how, that is what measures the wealth of a nation, is the ability to increase after-tax return on capital. So we’re pulling back the, think of it as pulling back the slingshot here. We have a lot of potential energy that will turn into kinetic energy during this year, next year, as these factories come online.
EISEN: So, do you think we have seen peak deficit during this administration?
BESSENT: I think the very, very good chance we have, that we are going to be laser-focused, as I said, OMB Director Vought, myself, the president, that, combined with the vice president’s Fraud Task Force, where I think we could save several hundred billion dollars.
EISEN: Yes, I mean, because you know, I mean, the funding needs, I think, are daunting to a lot of folks, the dependence on foreign bondholders, for instance. We saw the intervention in the Japanese yen, and that’s erased a lot of the progress there. And so there are kind of all these worries at once about what’s going to happen ultimately with these holders of Treasuries.
BESSENT: Well, again, again, people have bad information. I have asymmetric information, so I think that the market should think, well, why would we have joined the Japanese in the intervention at this time? Do we know something the market doesn’t know that, in terms of being willing to do you know what I would call a Treasury twist here in terms of the bond market? What do I know that the market doesn’t know? So I think the market’s probably gotten a little ahead of itself, a lot of people not much to do in August.
EISEN: Got it. And what about on rates? What if they have to raise interest rates? Wouldn’t that be problematic?
BESSENT: That has nothing to do with the decision that I announced this week on the buybacks.
EISEN: So you, so that raises the question about what happens next in Iran. And you mentioned, the president last night said that there’s more economic pressure coming on Iran. I know you’re heavily involved in this in executing this. What can we expect here?
BESSENT: Yes, you’re going to expect, I will be holding a press conference on Monday to talk about exactly what we’re going to do. And, again, we have asymmetric information, and I’m not sure why oil has popped up on this, because this, for now, for now, and it is at the president’s discretion, if we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart. But I would emphasize that is for now. And, look, we do have control of the strait.
So it is time for our allies and the rest of the world to make a decision. And we are going to squash the economy of this murderous regime, which that will curtail their ability to project power through their proxies. It will, it will mean that they cannot pay the military.
And what we have seen, I see lots of reports that said, oh, well, this has never worked. It does work, because we have a combination. It is a one-two punch. We have the blockade, and we are going to have the toughest sanctions in history. And I will tell you, this will work. It worked in Venezuela once we put up the blockade. It is working in Cuba right now. And it is going to work in Iran, and we are going to collapse this regime.
EISEN: You know, I just wanted to get your read on the economy, as we see oil prices marching higher again. We have seen tremendous resilience, as you noted, from the consumer, but there are signs that the job market may be cracking a little bit. Got a weak job, job report last month. I’m curious about your assessment and as to how much we can handle all of this.
BESSENT: Yes, I think the jobs numbers are quite noisy. And, again, Sara, the other thing that’s important too is, like, the jobs that we’re seeing are going to Americans. After the deportations that we have seen during President Trump’s administration and the closing of the border, that, like, this unfettered migration, we don’t need to produce as many jobs. And what’s really important here is, we are seeing a manufacturing renaissance, and that has shown. We’re seeing construction jobs pick up, and that is morphing into manufacturing jobs. You know, some of these numbers, the manufacturing construction numbers are the highest they have been in 15 years, and that is a combination of the president’s trade policy, tax policy, and energy policy.
EISEN: Yes, I mean, growth solves a lot of problems, Secretary Bessent. Finally, I just – the big headline is going to be, of course, on the big bond announcement. So I just – you indicated at the top of the interview that you are willing to go bigger and do more if the market doesn’t cooperate. How far are you willing to go?
BESSENT: Well, again, it’s not if the market cooperates. It’s we will see what the conditions are, and we will analyze them then. But I am confident that once the market sees through and looks at the fundamentals – all we’re trying to do is get people to focus on the fundamentals and not trade the headlines during a quiet period in a thin market. So, we are trying to keep the market in equilibrium.
EISEN: Well, Secretary Bessent, we certainly appreciate the opportunity to ask some of these questions that we know that investors are asking and wondering about. So, thank you for coming on and clarifying.
BESSENT: Good. Good. Sara, thank you. Good to be with you.
EISEN: Yes, good to have you, as always. That is the Treasury Secretary, Scott Bessent, joining us from outside the White House with a lot of information there, I thought, and a lot of news.
One-Word and Two-word Synopsis
- One Word: Lies
- Two Words: Lies, Hubris
Pack of Lies and Hubris Details
- Starting with the glaringly obvious, the US does not have control of the strait. If you are going to tell such obvious lies, why should anyone believe a word you say?
- There is no manufacturing renaissance. Jobs numbers prove that. There is a construction boom for power. But it is not spilling over into manufacturing as Bessent says.
- There has never been an economic blockade in history that resulted in a regime change. Economic sanctions on Venezuela did not work. The US invaded Venezuela. Even with that, the regime change is debatable.
- Bessent ducks a question and instead replies with a question of his own: Do we know something the market doesn’t know that, in terms of being willing to do you know what I would call a Treasury twist here in terms of the bond market? He has no answer. He pretends to know more than the market.
- Trying to keep the market in equilibrium is sheer hubris. Bessent, like Trump, believes he knows where interest rates should be. Only fools, charlatans, and sycophants do this.
- A “big tool kit” is why we are in this mess. Instead of fixing any fundamental problems, Congress, the Fed, and the Treasury repeatedly attempt to paper over them.
- Peak deficit is idiotic. Bessent knows full well how much additional military spending the administration seeks.
- The idea that $40 trillion is just a number is also idiotic. But Bessent has to say that. The requirement to work for Trump is to be a fools, a charlatan, and a sycophants.
Cream Puff Interview
Sara Eisen should be embarrassed by this creamiest of cream puff interviews.
There was not a single follow-up question to obviously Bullsheet answers by Bessent.
Curve Watcher’s Anonymous
Bond Watcher’s Anonymous (BWA), a subsidiary of Curve Watcher’s Anonymous (CWA), both me, notes that the yield on the 30-year long bond is back up to where it was before Bessent announced intervention to keep the market in equilibrium.
Side note for long-term readers: I used to frequent post yield curve charts by Curve Watcher’s Anonymous. Not realizing that was me, several readers asked “where can I follow CWA?”
I have been remiss. Apologies offered. Expect a Curve Watcher’s Analysis report soon.
What Is Leading US Construction Spending? Hint, It’s Not Manufacturing
Construction spending details are a real eye opener.
As a direct rebuttal to Bessent’s incredible lie regarding manufacturing, please see What Is Leading US Construction Spending? Hint, It’s Not Manufacturing
Construction spending details are a real eye opener. [Four charts and discussion]
Announcing Diesel Watcher’s Anonymous
Yesterday, I commented Good Morning Farmers. Diesel Is Only 27 Cents from a Record High
And crude is soaring again so Diesel rates to jump again tomorrow.
Today, Diesel Watcher’s Anonymous (DWA) reports that diesel is only 23.96 cents from a new record high.
Stay tuned for more DWA updates as we close in on record diesel prices.
But that’s OK because Trump Says “I’ll Never Apologize, You’re Just Paying a Tiny Bit More”
“Trump: For you to pay a TINY little bit more for your gasoline, you’re doing it so that a very evil country cannot have a nuclear weapon. Remember that when you’re paying $4. I’ll never apologize.”
Related Posts
August 19, 2026: Debt topped $40 trillion today. But let’s discuss what really matters.
What market manipulation is next? Diesel crack spreads?
August 20, 2026: Treasury Bond Manipulation Is Failing Already. What’s Next?
Also, we have a severe clash between fed policy and Treasury bond manipulations.
August 20, 2026: Bessent Says He Doesn’t Understand Oil Prices. I Can Help
He should read this blog, or ZeroHedge, or OilPrice. Here’s a 10-point cheat sheet.
Article posted with permission from Sons of Liberty Media
