Unhedged Can Trump drive down bond yields?
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Mar 25, 2025 The discussion kicks off with Trump’s ambitions for lower interest rates and the controversial Mar-a-Lago Accord. The hosts playfully dissect U.S. trade policies while exploring the current dollar dilemma and its effect on real estate. Insights into the treasury market reveal strategies for shorting 10-year bonds amidst expected volatility. The conversation takes a whimsical turn with humorous tales connected to Trump's oil sanctions, blending serious economic analysis with light-hearted commentary.
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Mar-a-Lago Accord Explained
- The "Mar-a-Lago Accord" is a proposed plan by economists close to Donald Trump to weaken the dollar and restructure the global financial system.
- It involves devaluing the dollar, pushing trading partners to strengthen their currencies, and potentially linking US bond purchases to tariff and security benefits.
Underlying Goals of the Accord
- The Mar-a-Lago Accord, while seemingly unlikely, reflects the Trump administration's focus on lowering bond yields and weakening the dollar.
- These goals aim to create more fiscal space for government spending, especially for tax cuts.
Bessent's Bond Strategy
- The focus on the Mar-a-Lago Accord might be misdirected; the Treasury Secretary's actions may be more significant.
- Scott Bessent's strategy of issuing more short-term debt could be manipulating bond yields to keep them low.