Ten-year treasuries aren’t buying what Bessent’s selling — And that’s a very big market plumbing problem

Short-term equity moves? Mostly noise — especially when the tape’s in full panic mode. But the 10-year yield? That’s the macro lie detector — and right now, it’s not buying what Bessent’s selling.

Since Trump’s so-called ‘Liberation Day’ tariff nuke on April 2, the 10Y’s done a full roundtrip. It dumped on recession fears — textbook flight-to-safety — but now? It’s snapped back above pre-announcement levels, sitting north of 4.25%.

That’s so far off-script; it’s like the bond market ripped up the cue cards and walked off the set.

Treasury Secretary Scott Bessent all but said he’s aiming for lower long-end yields — to soften the tariff blow and ease the government’s growing debt burden. Add in 5 Fed cuts already priced in, which was supposed to be a yield-suppression dream. Instead, bonds are pushing back.

Even with $10 trillion in equity value torched and the S&P down 17% since November, the 10Y is up. Not 50bps lower. Not even 25. But up !!. In a supposed “risk-off” market, that’s a giant red flag. The safety bid isn’t showing up. Treasuries aren’t acting like the haven pillow — and that’s dangerous.

If the bond market reflexivity breaks down here, we’ve got bigger problems than you’ll ever read on a Bloomberg Markets blog — and let’s be honest, that feed’s already a parade of doom.

Which brings us to the Fed — boxed in. The market’s already front-loaded cuts, but the long-end isn’t playing along. That’s a signal. Either, Foreign buyers are pulling back ( Bond Desks aren’t getting the same number of pre-auction calls)_ , or the market’s sniffing out the early stages of a “Sell America” trade. Maybe both.

If Bessent’s game plan depends on the bond market taking the edge off tariff pain, he’s got a problem. The 10Y is ignoring every policy cue. And when the bond market stops cooperating, everything gets harder — risk, credit, politics. The White House may need more than a playbook tweak.

But here’s the dollar landmine: if Treasuries keep bleeding while equities stay ugly, and that move isn’t echoed in other safe havens like bunds? That’s when the real danger kicks in. That’s the early smoke signal for a “Sell America” moment — the kind that unwinds dollar dominance fast and dirty.

We’re not flashing red yet, but the UST-Bund 10Y spread is the one to watch. If that starts gapping out for the wrong reasons, buckle up — that’s when the dollar stops being a lifeboat and starts looking like an iceberg.