00:00President Trump said that he could deploy the military to stabilize the bond market.
00:04Things seem to be going strangely.
00:07President Trump is causing controversy by mentioning the use of military force in relation
00:11to intervention in the U.S. bond market.
00:13President Trump, during a meeting with reporters on Friday, was asked about Treasury Secretary
00:17Scott Bessent's response to the bond market, and he said that the administration has several
00:20intervention tools it can use.
00:22In particular, he directly mentioned the use of military force as the most powerful tool
00:25among them.
00:26President Trump drew a line when asked if he had instructed Secretary Bessent to intervene
00:30in the bond market.
00:31He explained that Secretary Bessent wanted to handle it, and as someone with an excellent
00:34sense for bonds and interest rates, indicating that the response to the market was based
00:37on Secretary Bessent's own judgment.
00:39However, when the reporter pointed out that government bond yields had risen again afterward,
00:42the atmosphere changed.
00:43The reporter asked if President Trump had discussed additional market intervention measures with
00:47Secretary Bessent, and President Trump replied that there are various ways to intervene.
00:51He went on to say that one of those ways is the current measures being taken, and furthermore,
00:54if necessary, he would use military force.
00:57This is the first time in U.S. history that an American president has mentioned the possibility
01:00of using military force while explaining issues related to government bond yields and stabilizing
01:04the bond market.
01:05Earlier, the U.S. Treasury announced a plan to at least double the amount of long-term government
01:09bond purchases starting next month.
01:11The market expects that this measure could raise the price of long-term government bonds and lower
01:14yields.
01:15In fact, right after the announcement, the yield on 30-year government bonds fell from its highest
01:20level in 19 years, but then it started to rise again.
01:22The problem is that it's not easy for the U.S. government to stabilize long-term interest
01:26rates at the level it wants.
01:27Long-term government bond yields are affected by various factors, not just government policy,
01:31but also inflation expectations, fiscal deficits, the scale of bond issuance, and investors'
01:34risk perceptions.
01:35Therefore, it is inevitable that there will be analysis suggesting that simply expanding
01:39the Treasury's bond purchases alone will not be enough to continuously change the direction
01:42of the market.
01:43Secretary Bessent also emphasized in a Thursday CNBC interview that the administration has a variety
01:48of policy tools to stabilize the bond market.
01:50However, he did not specify what additional measures are being considered.
01:53Because of President Trump's remarks, it has become even more unclear to what extent
01:56the White House and the Treasury Department are actually considering market intervention.
02:00In particular, it is unclear whether the term military force actually refers to military
02:04action in the bond market or if it was meant to emphasize the strongest measures the U.S.
02:08government can mobilize.
02:09However, since the President's remarks themselves could influence investors' assessment of policy
02:13if they are conveyed to the financial markets, it is important to pay attention to how Secretary
02:18Bessent and the Treasury Department will respond in the future.
Comments