Bessent面临G20信誉考验，干预措施失效

Sean. A lot to get to with you. You. I first of all, I want to drive everybody to this story. It's a it's a great thing to read ahead of the G20 and as the G20 happens, uh, the idea of growth here, how much more complicated is it? May is, is growth in the US in the face of tariffs and the Strait of Hormuz? That is not completely open. Yeah. Look at Secretary Benson's going into the meeting that's starting today in Asheville.

We'll run through tomorrow. Uh, and he really wants to get the world on his side and to buy into Trump. And essentially this idea that deregulation will get you stronger growth. Now, you know, we haven't fully seen that here in the US. Uh, but globally, we've also seen growth kind of tick down. And if you talk to people outside the U.S. and we heard this, uh, directly from the German finance minister as he was heading towards this meeting, uh, the real big threats to global growth have been the Iran war, the impact on UN energy prices.

That's a war that was launched by President Trump, uh, alongside, uh, the Israelis, uh, and also tariffs, which have acted as a kind of damper, uh, on growth, uh, around the world and also here in the United States. Uh, so, you know, the rest of the world is coming to town and they're saying, okay, you know, we're happy to talk about growth and doing what we can to boost growth. But really, right now, when we're looking out at the world, the US is the one that's applying to big brakes on growth.

There is one other side to it, of course. There is this huge eye investment boom that's going on in the United States. And and there are certainly countries out there that are benefiting, uh, from it. Anyone that exports chips to the United States, whether it's Taiwan or South Korea, uh, they are really booming as a result. But, uh, the broad story for most people is there's high energy prices and there's tariffs and those are not great for growth.

Yeah. Well Sean I mean not just the growth stance from the Treasury secretary that's raising eyebrows here, but I'm sure that he's also going to be asked by what we call an interventionist summer. Uh, given the Treasury's role in U.N. interventions. And then, of course, the most recent announcement for, uh, an upsize and buybacks. How do you think that's going to be received at the G20? And is it something that could raise some eyebrows among, uh, his contemporaries, given that this is probably the most involved the Treasury has been in these matters and while.

Right. Absolutely. I mean, I you know, it feels like, uh, Scott Best this summer has kind of rewritten what, uh, the Treasury secretary's role looks like. Right. He's we've we've certainly seen the most interventionist Treasury secretary outside of a crisis. And in a long time, uh, it is very unusual for the United States Treasury to dip into foreign exchange markets and support another currency right in the yen. And what we saw a few weeks ago.

And certainly it's it's incredibly unusual for the Treasury secretary to, uh, look at bond markets and trade, you know, target long and, and, uh, yields. I mean, we saw Stan Druckenmiller write an op ed in the, in the Wall Street Journal, kind of smacking his former mentee and saying, hey, you know, leave the bond market alone. That's an incredibly unusual dynamic. And then you, of course, also have this, this Iran intervention.

And really, um, you know, this idea is you're with us or you're against us and we're going to come after your financial institutions if you're not with us and threatening kicking countries out of the dollar system, that's just not the way Treasury secretaries have have behaved in the past. And so everyone else who's coming to Astro, uh, and has landed there is certainly has all of that in mind and is trying to figure out, uh, what Scott Benson is up to.

They're also looking at what feels like a divergence in goals between Scott Bassett and Kevin Warsh, the new fed chair. Uh, you know, it seems like Scott Bassett wants to see lower interest rates, particularly at the long end. Uh, and, uh, we know, of course, that Kevin Warsh on Friday was talking about tackling inflation and making clear that raising interest rates is on the table. Those are two diametrically opposed goals, we should say.

Scott Benson today spoke with reporters and said that he and Kevin Warsh are on the same page and tried to play down, uh, those reports. He's also tried to play down, uh, some of the interventions that he's done over the summer, both in terms of the yen and in terms of bond yields. But, you know, this is a very different looking Treasury secretary. And going into a meeting today, that is, when you think about it in the kind of long run, it's an important one in terms of American, its ability to project economic power.

His credibility really is at stake and in a very interesting way. Over the next few days. Credibility though for for whom is it for us investors? Is it for for G20 colleagues, other finance ministers of developed nations around the world? Who who is the credibility most at risk with regard to. Yeah, look, I think what we've seen in the last few weeks is kind of credibility in the markets. Right? That's been the big question.

The yen, uh, intervention. We saw that on Friday go back to 160 level that that had kind of triggered the the intervention in the first place. So the markets haven't really bought into, uh, into the threat of intervention there. We're seeing the same thing in the bond markets. Right. And we've seen this push back from, from Stan Druckenmiller and, and others, uh, really kind of raising this question of, of what the Treasury secretary is doing.

The next question is the kind of geopolitical one. And that is, you know, the Treasury secretary is a key economic policymaker in the world's largest economy. He is one of the most powerful men in the world and how he projects that power and how he uses that power in the global economy is incredibly important. And behind all of that is the question of whether you believe him or not. Um, when he says things. And that is the credibility question here.

They're looking at the bond market. They're looking at the currency markets and saying, well, the markets don't seem to believe I'm here. Now they're thinking ahead of the growth piece and they're saying, well, you know, he wants more growth. But let's think about what the US is actually doing here rather than what it's saying. And you know, coming out of this they're there. Let's see if they have any questions answered.

I mean, there is a real risk here that Scott Beasant, uh, you know, overshoots, uh, and that he comes out of this, uh, with less credibility than he had, uh, going in. And that that has an impact on America's ability to project its economic power around the world. Um, that's something we're going to see and see how it plays out in the coming months.