The story

The yield on 10-year Treasury bonds surpassed 5 percent on Monday for the first time since 2023 and only the second time since the 2008 financial crisis, according to The New York Times. The spike came after Treasury Secretary Scott Bessent ordered the Treasury Department to buy back $5.2 billion of long-dated debt in an attempt to suppress borrowing costs. The move demonstrated the limits of Bessent's ability to influence global markets and dealt a blow to his credibility as a market oracle.

Bessent, a former hedge fund manager, had declared at Southern Methodist University last week that he had asymmetric information and dared investors to bet against him, saying he was now the house. Early last year, Bessent said he wanted to lower the 10-year yield below 4 percent, but instead the opposite has happened. The intervention drew criticism from his mentor, legendary investor Stanley Druckenmiller, who penned an op-ed in The Wall Street Journal warning that efforts to suppress yields would backfire.

During a House Financial Services Committee hearing on Tuesday, Bessent defended his department's bond market intervention during nearly three hours of questioning. Rising bond yields are a political problem for the Trump administration because they translate to higher borrowing costs for Americans, increasing the cost of living and squeezing corporate earnings by raising what it costs for companies to borrow money. In June, Bessent warned President Trump that the bond market has taken out more governments than howitzers.