Ed Yardeni, president and chief investment strategist at Yardeni Research, said
he believes Walsh is using aggressive inflation rhetoric to lower borrowing
costs by pushing down government bond yields that feed into mortgage and auto
loan rates. Yardeni said he thinks the Treasury and the Fed have effectively
struck a new arrangement to suppress the 10‑year Treasury yield: Bessent and
Walsh are acting as a team and have persuaded Trump that the best way to lower
borrowing costs is to take a hard line on inflation and, if necessary, raise
rates. That, Yardeni said, should push down bond yields and stimulate the
economy. He noted Bessent has recently acknowledged the bond market’s power and
Trump’s acceptance; Bessent told the New York Economic Club on June 23 that more
governments have been toppled by the bond market than by artillery.
