September 10 International Forex News

Traders Ignore Bessent's Tough Talk as US Treasury and Oil Prices Move Against His Wishes

On September 10, according to foreign media reports, US Treasury Secretary Scott Bessent has repeatedly warned investors that betting against him will leave them with heavy losses. He has insisted that investors are making a serious mistake whether they are driving up oil prices, pushing down the yen or lifting US Treasury yields, because he is on the opposite side of those trades and possesses key information about government policy plans that investors do not have.

In game-theory terminology, this is known as "information asymmetry," a point Bessent likes to emphasize. However, since Bessent began making forceful statements about the bond and oil markets, both of which directly affect the well-being of the American public, market movements have gone against his wishes.

"The market has called his bluff," said Mark Spindel, founder and chief investment officer of Potomac River Capital. He said the enormous federal deficit, combined with concerns about the Federal Reserve's ability to contain inflation, has overshadowed Bessent's various initiatives.

Probability of a September Fed Rate Hike Stands at 60.2%

On September 10, according to the CME FedWatch Tool, the probability that the Federal Reserve will leave interest rates unchanged in September is 39.8%, while the probability of a cumulative 25-basis-point rate increase is 60.2%. By October, the probability of rates remaining unchanged is 28.3%, the probability of a cumulative 25-basis-point increase is 54.3%, and the probability of a cumulative 50-basis-point increase is 17.3%.