00:00Once the market understands that we are focusing on fiscal consolidation and that we are trying to bring the market
00:08back into equilibrium in a thinly traded market, I think I'm confident that bonds will continue to climb.
00:17Treasury Secretary Scott Besson is trying to rein in the long end of the bond market after yields climbed to
00:22the highest level since 2007 this week off the back of concerns about inflation and the rising U.S. debt,
00:28which is now north of $40 trillion.
00:31Besson announced the Treasury Department would increase the size of its buybacks of longer-dated securities and said a new
00:36fiscal initiative to address high borrowing costs is coming.
00:39But the market isn't necessarily buying that that will be a long-term solution.
00:44So we've been asking our guests on Balance of Power, how do you really fix the problem?
00:49It's the structural drivers in the U.S. economy.
00:52And I think that's why you saw what Treasury did yesterday not really work, because it's not Treasury's problem to
00:58solve. It's more fundamental.
00:59There's two solutions. You can cut spending or you can raise taxes, you know, or you could do some combination
01:06of the two of those.
01:08Everyone in the policy community and frankly all the politicians know what we need to do. They're just unwilling to.
01:13Every year that we wait, the worse it gets. And at this point, the more the Treasury markets and other
01:18places are giving us warnings that time is not on our side and we shouldn't wait for an emergency to
01:23cause us to finally take action.
01:25The best thing we could be doing right now is, yes, we've got to rein in spending.
01:29We're doing what we can, but the problem is we cannot pass a budget because we don't get the 60
01:34votes in the Senate.
01:35I have been sitting down with my Democratic and Republican colleagues for months and we have been talking precisely about
01:41this, but it's going to require action in the next Congress in particular, because we've already seen if we do
01:49nothing, there is going to be an automatic reduction in benefits with Social Security in the next six years.
01:55And that I don't think anyone supports.
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