Bloomberg Surveillance · Thursday, August 6, 2026
There is a growing concern that the bond market could become a significant problem, with too much bond supply and rising yields being the core issue. Secretary Yellen is urged to focus on the bond market, which is signaling a need for necessary issuance and bond repricing, rather than distractions. The Federal Reserve is also under pressure to deliver the necessary tightening and for the Treasury to provide required duration to avoid a market correction.
“Well, I think that's one of the questions is how does this leverage bubble pop? And typically when you look through time, it's all about the bond market. And so I think one of the things when we see Secretary Bestnt come out and try and sort of distract from the core issue here. The core issue is there's too much bond supply, yields are rising.”
“And instead he seems very cautious along with his friend in the Eccles building, who to actually deliver the type of policy that's necessary to make the adjustments of this economy.”
“So when he sees that simply from a FED hold, you see the long end move a point or two and then keep going, that's a real concern. He understands that, I mean his work. It's odd that he's getting worked up about using the FED to finance the Japanese intervention because obviously he's going to do whatever it takes in order to not have pressure on the long end of the bond market as the Japanese intervene.”