Treasury Secretary Scott Bessent is set to speak at the Republicans' midterm convention in Dallas on Wednesday, the first sitting Treasury secretary to address a national political convention in 50 years. The appearance comes as his bond-buyback push to calm Treasury markets falters, with the 10-year yield rising to 4.84% midafternoon Wednesday, its highest point of Trump's term.
Bessent's prime-time speech in Dallas will mark the first time in 50 years that a sitting Treasury secretary has spoken at a national political convention, since Treasury Secretary William E. Simon addressed the Republican National Convention in 1976. The Dallas gathering is also the first midterm convention the GOP has held.
A political turn colliding with market intervention
The speech lands as the Treasury Department is in the midst of intervening in the bond market for long-term U.S. debt. The department said Wednesday it would buy back as much as $6 billion in long-term Treasury debt this week, with a cap of at least $4 billion in operations later this year. Bessent has described the operations in broader terms, saying at a Breitbart event Tuesday that a fever had been building in the markets and that he acted to stem it.
That intervention worked at first: yields fell after Bessent announced enhanced buybacks on Aug. 19, following days of headlines about a global sell-off in government bonds. But the effect proved short-lived. Yields on long-term Treasury debt rose Wednesday after the department disclosed the size of the buybacks, which had been anticipated.
Higher yields can help savers who earn income from holding debt, but they squeeze borrowers facing higher costs for new mortgages and auto loans.
Why credibility matters for the role
Stephen Myrow, managing partner of Beacon Policy Advisors and a former advisor to Treasury Secretary Hank Paulson, said Treasury generally doesn't have tremendous power beyond the market credibility of its secretary, since the department can't print money the way the Federal Reserve can. Former Treasury Secretary Janet Yellen said she was never asked to speak at an explicitly political event and was careful to avoid one, citing the Hatch Act, which limits partisan political activity by most executive branch employees. Other secretaries have appeared at conventions in narrower ways: James Baker appeared in a video at the 1988 Republican convention before resigning to run George H.W. Bush's campaign, and Robert Rubin spoke at the 2000 Democratic convention a year after leaving the Treasury post.
Myrow said Bessent's standing with investors underpins his usefulness to the White House. According to CNBC: "The real value Bessent has for Trump is his credibility in the market", Myrow said, adding that losing it would erode what Bessent provides to Trump and the country.
Source: CNBC
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