Bessent Sees US Banks Taking Up More Debt Due to SLR Relief

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00:00Do you anticipate, Mr. Secretary, that the U.S. government's financing needs, the Treasury's

00:04financing needs will increase over the next couple of years? I think that we will see what

00:13happens to interest rates. And there could be an increase in financing needs based on yields.

00:21But everything that I'm seeing says that inflation is under control and likely coming down.

00:28And there's, of course, the cost to finance that. And we look at where yields have been. And we know

00:35there's been a lot of volatility there, some stability in recent weeks, partly because of

00:40some of the things that you've done and said publicly. But we've also seen a little bit of

00:44reticence to buy into longer-dated U.S. Treasuries. I know you have been public about the idea,

00:51at least in the short term, of relying a little bit more on shorter-term Treasury issuance. Do

00:57you anticipate that will continue? Well, I think what we're going to see is

01:01one of the underreported things of the one big beautiful bill is it also gets us away from this

01:09terrible debt ceiling dilemma. And because of that, we've had to constrain issuance. So it's likely

01:17that initially we will use bills to refill the Treasury general account.

01:22Do you worry about any potential rollover risk in that strategy?

01:27No, I don't. We've seen very durable and robust Treasury auctions. I see who the buyers are. I think

01:39that we are going to see U.S. banks would take up more of the debt issuance because of the

01:47supplementary leverage ratio relief that they're going to be getting. And we're going to pass the

01:57bill today. President Trump's going to sign that tomorrow. And then probably the following week,

02:03we're also going to have the stablecoin legislation, which I think could create at least $2 trillion in

02:11demand for Treasury bills.

02:20You