Investors hoping for President Donald Trump to intervene with policies to stabilize the declining stock market may find themselves disappointed, according to Treasury Secretary Scott Bessent. On Friday, Bessent addressed the current market conditions, highlighting that the administration is focusing less on stock prices and more on bond yields as indicators of economic health.
The 10-year Treasury yield has seen a significant drop, falling more than half a percentage point from its mid-January peak. This decline has fueled concerns about inflation pressures and the overall market outlook. Bessent emphasized that bond yields are now considered a more reliable measure of the administration's views than stock prices, which have been subject to volatility.
The Dow Jones Industrial Average has experienced a decline of approximately 2% since the inauguration, reflecting a volatile market environment. Prices have surged and swooned depending on daily headlines, leading to discussions of a potential "Trump put." This term implies an expectation that President Trump might attempt to halt market sell-offs at some point, a notion dismissed by Bessent.
"The Trump call on the upside is, if we have good policies, then the markets will go up." – Scott Bessent
Stocks initially surged when Trump was elected in November, only to relinquish all those gains since. The American public remains skeptical of the administration's economic performance, despite initial market optimism. Bessent noted that the administration's focus is not solely on stock market fluctuations but on broader economic indicators.
During Trump's first term, the market's performance has been under close scrutiny. However, recent developments suggest a shift in focus towards more stable economic measures. The administration believes that bond yields provide a clearer picture of inflationary trends and long-term economic prospects.