Prediction market traders doubtful Bessent’s bond interventions will push yields lower
Speculators still see yields hitting new highs in 2026 and ending the year at levels elevated from where they're currently trading.
TL;DR
- Treasury Secretary Scott Bessent is employing departmental tools to cap rising yields.
- Prediction market traders on Kalshi and Polymarket are skeptical of Bessent's efforts to significantly lower yields.
- Traders on Kalshi predict a 56% chance the 10-year Treasury note yield will be at or above 4.75% by the end of 2026.
- Polymarket speculators give 2-in-3 odds that the 10-year Treasury note yield will cross 4.8% in 2026.
- Global bonds recently experienced a sell-off due to inflation risks and the U.S.-Iran conflict.
- The U.S. national debt surpassed $40 trillion, adding pressure on domestic yields.
- The Treasury Department announced it would double debt buybacks to stabilize the bond market.
- Yields initially fell on the buyback news but then rose again.
- The Treasury may consider using its $1 trillion General Account to fund increased buybacks.
- Prediction market traders anticipate that any yield declines following these announcements will be temporary.