“Look, there’s nothing magic about that $40tn number,” the US Treasury secretary, Scott Bessent, told CNBC insouciantly last week, as the country’s debt mountain surpassed another bleak record.
Yet Bessent’s decision to intervene in government bond markets in an effort to combat soaring yields belied his studied calm in TV interviews – and reignited fears the US may be on the road to a debt crisis.
Half a lifetime ago, in 1992, Bessent cut his teeth in markets shorting the pound alongside George Soros in the chaos that led up to Black Wednesday, when the UK plunged out of the European Exchange Rate Mechanism.
Today he is on the other side of the tussle between policymakers and markets. When the US Treasury intervened to help prop up the Japanese yen earlier this month – crucially by selling euros, not the US dollar – it was widely read as a sign of weakness.
Japan is a…
