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Evidence Is Evidence: The Questions Scott Bessent Couldn’t Answer
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My favorite sentence in Scott Bessent’s effort to dodge Elizabeth Warren’s oversight via public trolling states that the Treasury market’s liquidity and performance compared to US peers is evidence.The U.S. Treasury market’s liquidity and performance versus global peers is evidence.
It doesn’t say what it is evidence of.
Senator Warren wrote the letter, “to ask how the Treasury Department (Treasury) plans to address the harm to families and risks to the financial system from skyrocketing interest rates, which are driven in part by President Trump’s failed economic agenda and your market misadventures.” Her letter laid out the following:
- 10-year Treasury yields are the highest they’ve been since 2002 (sourced to WSJ)
- Those surging yields harm consumers, especially through higher mortgage rates (sourced to NBC, NYT, Mortgage News Daily, National Association of Realtors)
- That surge is self-inflicted, and comes on top of efforts by the Fed to rein in inflation, which is driven by the Iran War
- Trump’s policies are driving up National Debt (citing US Bureau of Economic Analysis)
- Trump’s policies, including both the Big Ugly Bill and the Iran War, are driving up the deficit (citing reports on the financial impact and effects of the law and the AP)
- A long paragraph on what Warren calls Bessent’s “chaotic interventions in the market, apparently in hopes of stemming the damage” citing this CNN story to claim Bessent’s intervention is failing:
Rather than advise the President to lower costs, you have chosen to launch unprecedented and chaotic interventions in the market, apparently in hopes of stemming the damage. On August 19, 2026, the Treasury Department announced its plan to double the size of its buyback operations, in which it issues short-term Treasury bills to buy back longer dated bonds.15 There were reports that the Treasury reportedly was even considering tapping its cash on hand, maintained in the Treasury General Account at the Federal Reserve, to further increase the buybacks.16 Since then, Treasury has gone through with three rounds of these buybacks: $5.2 billion on September 10, $4.1 billion on September 24, and $6 billion on October 1.17 While you asserted that the goal of these purchases was to make it easier for investors to buy and sell Treasuries, others—including your former boss —see your move as an attempt to reduce the high interest rates on longer term Treasury debt. Unfortunately, your intervention is failing.18 Indeed, bond yields rose on the days of the first two buybacks, and while they dipped on the day of the third, they climbed again the following day and remain high.19 Buybacks are not designed to lower rates, and they are financed by issuing new debt, which only adds to the pressure pushing rates higher.20 Further, the administration’s casting about for various measures to reassure the markets is undermining the longstanding strategy that Treasury issuance—and buybacks—should be “regular and predictable” to keep financing costs lower over time.21
- Another paragraph describing the financial struggles of Americans citing (among other things) this NYT story
She asked the following questions:
- Is the Treasury planning to draw down the Treasury General Account to expand buybacks further? If so, on what timeline? What risks does that pose to Treasury’s cash position and to market liquidity?
- What analysis has the Treasury done—including through the Bureau of Tax Analysis, Office of Economic Policy, and Office of the Secretary—on how higher yields are affecting mortgage payments, car loans, and credit card costs for American families? Provide copies of that analysis.
- How is the Treasury ensuring lenders don’t overcharge consumers at a time when the Consumer Financial Protection Bureau has been gutted? What specific steps is the Treasury taking, beyond buybacks, to bring long-term yields down?
- Will you recommend that the President end the war in Iran and pursue other policies to reduce inflation and lower costs for families? If not, what is your plan to lower costs for families?
Rather than answer any of those four questions — what he’s doing with his buybacks, whether Treasury has tracked how higher yields are affecting consumers, whether Treasury is protecting consumers against being cheated, and whether he has counseled Trump to end the war that is spiking prices — Bessent did the following:
- Told her she should take an introductory economics course
- Accused her of blaming the Fed in 2022 when inflation spiked under Biden
- Rather than answering her question about his plans on the buybacks, instead claimed that evidence is evidence
‘The “interventions” you describe as “unprecedented” have been underway since May 2024. The buyback program has been well received by market participants in bolstering Treasury liquidity, which reduces market volatility, increases the convenience yield of Treasury securities and ensures the best value for the taxpayer. The continued enhancements optimize Treasury market liquidity in primary and secondary markets. The U.S. Treasury market’s liquidity and performance versus global peers is evidence. [my emphasis]
- Responded to her comments about the services that the Big Ugly Bill stripped from Americans by boasting that “the average refund this filing season was over $3,400,” though some of that was because people overpaid last year and it is an average that includes especially large refunds from changes to SALT
- Complained about these comments in this paywallwed Punchbowl article, which was itself a response to this WSJ profile laying out Bessent’s bullying and his failure to meet his own goals
To summarize, Warren asked if he’s doing anything to help American consumers and whether he knows what he’s doing with risky market interventions, and he responded by blaming Joe Biden and then rather than responding to criticisms in the WSJ and Punchbowl (which, incidentally, show that his interventions have not been well-received), accused her of being stupid.
It did serve Bessent’s apparent purpose, however, of going viral among a bunch of people who apparently haven’t read what it says — or perhaps have only read Bessent’s Native American slur.
Accused of being a bully whose management makes the US less safe, Scott Bessent decided to waggle his dick around and dodge any question about his performance.
Which only raises more questions about whether he could manage an increasingly likely financial crisis.
The post Evidence Is Evidence: The Questions Scott Bessent Couldn’t Answer appeared first on emptywheel.