Analysis claims US Treasury Secretary Scott Bessent may be orchestrating a US Treasury short squeeze, aiming to push 10-year yields to 4.3% before the midterm elections.
Fox Business reporter Charlie Gasparino, citing informed Wall Street executives, stated that U.S. Treasury Secretary Scott Bessent is attempting to artificially trigger a massive short squeeze by utilizing CTA short positions, which are near historical extremes, through methods such as Treasury buybacks and increased issuance of short-term bonds. Data from Goldman Sachs shows that CTA trend-following funds' bond short positions have reached multi-year highs, and if prices rise by two standard deviations, the scale of short covering could hit a new historical record. This move aims to push the 10-year U.S. Treasury yield from its current level to around 4.3% before the midterm elections, providing political breathing room for the Donald Trump administration.
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