Trump’s desperate move to mess with markets is destined to fail

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With the midterm elections less than three months away, President Donald Trump’s Treasury Department is starting to look desperate about the soaring cost to borrow.

The Treasury said it would increase its buybacks of longer-term government bonds “by at least double”, an amount that analysts figure would bring purchases to $US32 billion ($45 billion) per quarter. Make no mistake about the motivations: 30-year bond yields this week hit their highest since 2007, pushing borrowing costs higher for the government, businesses and consumers.

Key mortgage rates are back up to around 7 per cent, a fresh blow to voters that were promised easier financing conditions under this government and ended up getting more of the same. US public debt surpassed $US40 trillion for the first time, and has now surged by a third in less than five years, as US lawmakers continue to shrug off calls to contend with historically wide fiscal deficits.

In many ways, hedge fund manager turned Treasury Secretary Scott Bessent is doing his best impression of King Canute, whose attempt to command the incoming tide to stop inevitably failed.

The Treasury described the buybacks, planned to start September 9, as a form of “liquidity support” — which is what they were intended to be when the program was created in 2024. In this case, “liquidity........

© The Age