Week of August 24, 2026
Treasury Secretary Scott Bessent’s strategy of issuing more short-term Treasury bills while buying longer-term bonds may provide some temporary downward pressure on long-term rates, but we believe its lasting impact will be limited. The most powerful way to lower interest rates is to reduce the federal deficit. Large deficits require heavy government borrowing, competing with the private sector for available capital and pushing rates higher. Our US Interest Rate signal remains unchanged for now. Credible efforts to reduce the deficit through higher government revenues and spending reductions would change our outlook.
Bob Bilkie, CFA
