Bessent Plan Triggers Short Squeeze in Markets

US Treasury Secretary Scott Bessent's plan to lower borrowing costs by expanding bond buybacks has sparked heated debate in the markets, while key market indicators and positioning data suggest the move is having an impact. Following the announcement of the plan, short positions in US swap and options markets have been observed to be squeezed. This is reshaping investors' expectations for Treasury bonds and creating a sense of confidence among market participants, dubbed the 'Bessent put.' In particular, the covering of short positions in futures has led to a rise in bond prices and a decline in yields. Experts note that this move has increased the credibility of the plan, but its long-term effects remain uncertain. With market volatility expected to persist, investors should closely monitor the Treasury Department's next steps. This is not investment advice.