{"id":2087829,"date":"2023-11-02T11:06:02","date_gmt":"2023-11-02T15:06:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/treasury-secretary-janet-yellen-is-talking-her-book\/"},"modified":"2023-11-02T11:11:40","modified_gmt":"2023-11-02T15:11:40","slug":"treasury-secretary-janet-yellen-is-talking-her-book","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/treasury-secretary-janet-yellen-is-talking-her-book\/","title":{"rendered":"Janet Yellen, Treasury Secretary, Advocates for Her Interests"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ftreasury-secretary-janet-yellen-is-talking-her-book%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2087829&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<h2>Commentary<\/h2>\n<p>The tried-and-true Wall Street maxim of he\u200b or she\u200c is \u201ctalking their book\u201d couldn\u2019t be more accurate or timely than what we are hearing from Treasury Secretary Janet Yellen. She is apparently in full denial of the stress being placed on\u200d the \u2062bond market \u2064due to escalating debt issuance \u2062and elevating\u200d yields from lack\u200c of demand for U.S. debt by all classes \u2064of\u200b buyers.<\/p>\n<p>Secretary\u200b Yellen suggests \u2063the rise in yields\u2014which has resulted\u200b in benchmark Treasury rates reaching their highest level \u200bsince the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/milton-friedmans-revenge\/\" title=\"Milton Friedman\u2019s Revenge\">global financial crisis<\/a>\u2014essentially points to the strength of the economy, according to\u200d Bloomberg. The\u200b notion \u200dthat the surge is\u2064 a\u200c consequence of\u2062 the U.S. budget deficit was dismissed by her last Thursday. I guess\u200c she missed the \u200dnews flash that the five-year note auction drew a high yield of 4.23 percent and a bid-to-cover ratio of 2.27, below the\u2063 norm of 2.42, and at the most recent 30-year Treasury auction, bidders\u2063 showed their\u2062 lowest interest in \u200bthe long bond \u2063since 2021, evidenced \u200dby primary dealers having to buy \u2063nearly 18.2 percent of\u2062 the debt. The yield \u2063jumped to 4.86 percent, before the flight to safety trade took hold\u200d on \u200cFriday. As a rule, primary dealers are\u200b required to take the debt not purchased by other \u2062bidders.<\/p>\n<div class=\"shortcode\">\n<div class=\"border-comp-divider mb-4 mr-4 w-full max-w-[500px] border px-5 py-4 text-[16px] leading-[20px] text-[#262626] md:float-left\" id=\"in_article_related_stories\">\n<h2 class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related\u200d Stories<\/h2>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-4 sm:line-clamp-3\">\n            <a href=\"http:\/\/www.theepochtimes.com\/us\/treasury-to-expand-bond-sales-to-fund-soaring-government-spending-5521091?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3 class=\"text-sm sm:text-base\">Treasury to Expand Bond\u2064 Sales\u2064 to \u200dFund Soaring Government Spending<\/h3>\n<p>            <\/a>\n          <\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">11\/1\/2023<\/div>\n<\/p><\/div>\n<div class=\"shrink-0 basis-[70px] sm:basis-[120px]\">\n          <a href=\"http:\/\/www.theepochtimes.com\/us\/treasury-to-expand-bond-sales-to-fund-soaring-government-spending-5521091?ea_src=author_manual&#038;ea_med=related_stories\">\n            <picture><source type=\"image\/webp\" https:><\/source><source type=\"image\/jpeg\" https:><\/source>\n            <\/picture>\n          <\/a>\n        <\/div>\n<\/p><\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-4 sm:line-clamp-3\">\n            <a href=\"http:\/\/www.theepochtimes.com\/article\/wall-street-opens-higher-as-treasury-yields-retreat-earnings-in-focus-5515796?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3 class=\"text-sm sm:text-base\">Wall Street Opens Higher as Treasury Yields \u200dRetreat; \u2062Earnings in Focus<\/h3>\n<p>            <\/a>\n          <\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">10\/24\/2023<\/div>\n<\/p><\/div>\n<div class=\"shrink-0 basis-[70px] sm:basis-[120px]\">\n          <a href=\"http:\/\/www.theepochtimes.com\/article\/wall-street-opens-higher-as-treasury-yields-retreat-earnings-in-focus-5515796?ea_src=author_manual&#038;ea_med=related_stories\">\n            <picture><source type=\"image\/webp\" https:><\/source><source type=\"image\/jpeg\" https:><\/source>\n            <\/picture>\n          <\/a>\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>There\u200c was better sponsorship in\u2062 the seven-year\u200b auction last Thursday, implying\u2062 that\u2063 might be the sweet spot for the \u200binstitutional appetite as to length of maturities. When foreign central banks, sovereign \u200bcountry \u2062funds, pensions, and endowments\u2062 don\u2019t line up to soak up large-scale bond auctions, it is then left \u200cto mutual funds, hedge funds, smaller pension funds, and retail \u200dinvestors to soak up the excess. China has also been a net seller of Treasurys that\u2062 has to be absorbed as well, adding further pressure.<\/p>\n<p>Even Federal Reserve\u2062 Chairman Jerome Powell is chiming in lately about the role of escalating \u2063bond yields and\u2062 the potential to rapidly tighten financial conditions. Such a public view \u200dfrom the Fed could imply some\u2064 influence on monetary policy going forward. Mr. Powell\u200b noted the resilience of the economy possibly contributing to \u200cthe role\u2062 in rising yields, which\u200c is what \u2064Yellen is touting\u2063 as\u2064 the boogie man for plunging bond \u2063prices.<\/p>\n<p>This \u2062week, investors will be riveted on two\u2063 non-earnings-related\u2062 events: the\u2063 meeting \u200bof the \u2063rate-setting Federal\u200c Open Market Committee meeting on Nov. 1 \u2064and the announcement \u2062of the Treasury Department\u2019s new borrowing plan that\u200d will be announced just prior to \u200dthe Fed\u2019s release of its policy statement. Early insight into the plan shows an emphasis on increasing sales\u200d of long-dated debt \u2064to fund a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-repeats-misleading-claim-that-even-left-leading-wapo-has-called-him-on-bottomless-pinocchio\/\" title=\"Biden reiterates 'misleading' claim, dubbed 'Bottomless Pinocchio' by left-leaning WaPo.\">growing budget deficit<\/a>. \u200cBond\u200c dealers are forecasting\u2062 a refunding size\u2064 of around\u2062 $115 billion, which would be\u200b consistent with increases in previous fundings. The Treasury may opt for shorter-term maturities\u2063 given the spike in\u2064 long-term yields and the \u2062recent\u2062 lower level of demand for long-term maturities.<\/p>\n<p>Secretary\u200c Yellen continues to defend her position that the surging\u200c federal debt burden\u200c remains under control. \u201cThe statistic\u200d I \u2062look at most often to judge our fiscal course is net interest as a share of GDP,\u201d she noted in a CNBC interview, referring to the net payments the \u200c<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-biden-budget-would-cut-gdp-by-1-5-over-three-decades\/\" title=\"Analysis: Biden Budget Would Cut GDP By 1.5% Over Three Decades\">federal government makes<\/a> on its debt relative to \u2064U.S. gross domestic product. \u201cAnd even\u2064 with \u2064the rise we have \u200dseen in interest rates that remains at a reasonable level.\u201d Ms. Yellen points to federal interest payments of \u20631.86 percent of GDP for 2022, according to data \u2063from the Federal Reserve. That is in line with \u2064the historical average going back to 1960 of just \u2062under 2 percent. What fails to \u200cbe mentioned is that the 1.86 percent represents a carrying cost of\u2064 tens of trillions in debt with fixed rates of less than 2 percent, issued from \u20642008\u2063 through 2021. That \u20622 percent number also <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/treasury-secretary-janet-yellen-is-talking-her-book\/\" title=\"Janet Yellen, Treasury Secretary, Advocates for Her Interests\">reflects extremely low\u2063 budget deficits \u200crelative<\/a> to \u200btoday\u2019s ballooning debt. \u2063When \u2062factoring \u200din the\u2064 surge\u200c in rates over the past\u2064 year on $33.5 trillion of outstanding debt, the going forward net payments on debt relative to GDP will likely gap way higher\u2062 when the \u2063Fed reports the 2023 data.<\/p>\n<p>Critics of Ms. Yellen assail her policy stance as that of having a \u200dzero-interest rate introductory offer for \u2064a credit \u2063card, followed\u200c by multiple\u200d approvals for \u200cnew spending limits where higher interest rates kick in\u2062 along the way and create monthly payments that can\u2019t\u200b be sustained, because they eventually become the largest \u200cline item\u2062 within the federal budget.<\/p>\n<p>Mark Spitznagel, \u200dfounder of\u2063 the \u2064hedge\u2062 fund Universa Investments, told\u2062 Fortune \u200dmagazine in August that\u2063 we\u2019re \u2063living through the \u201cgreatest credit bubble in human \u2064history.\u201d<\/p>\n<p>&#8220;We\u2019ve never seen anything like this level of total debt \u200dand \u2062leverage in \u2062the system. It\u2019s an experiment,&#8221;\u200c he \u200dsaid. \u201cBut we know that credit\u2064 bubbles have to pop. We don\u2019t\u200d know when, but we know \u2063they have to.\u201d<\/p>\n<p>Mr. \u200dSpitznagel pointed out that total \u200cpublic household debt hit a record $17 trillion in the second quarter, with non-housing debt hitting an all-time high of $4.7 trillion, and the U.S. debt-to-GDP ratio at 120 percent, according \u2064to the Federal Reserve.<\/p>\n<p>While Secretary Yellen admits that, moving forward, the government will need to \u201cmake\u200b sure\u201d to keep deficits under control,\u200b otherwise the national debt could become an issue,\u2064 it seems \u200bshe is blind\u2063 to\u200b the fact that the problem is here and now. America needs a new Treasury secretary that has \u200cthe mind \u2063of a responsible banker and \u2062doesn\u2019t \u2064think like \u200da credit card company.<\/p>\n<\/blockquote>\n<p> <\/p>\n<h2> \u2063How can acknowledging and addressing concerns about the sustainability\u200b of U.S. debt levels and potential inflationary pressures contribute to a healthier bond \u2063market and maintain investor confidence in the U.S. economy<\/h2>\n<p><span> <\/p>\n<h2>Analysis of Treasury Secretary Janet Yellen&#8217;s Comments on the Bond \u2062Market<\/h2>\n<p>In recent \u200ctimes, Treasury Secretary Janet Yellen has been making statements that seem \u200bto ignore the mounting pressure on the bond market. These remarks indicate a lack of awareness about the increasing debt issuances and\u2064 the resulting rise in\u200c yields due \u200bto a lack of demand for U.S. debt from prospective buyers across all classes.<\/p>\n<p>In response to the surge in yields that\u2063 has led to\u200d benchmark\u200b Treasury rates reaching their highest level since the global financial crisis, Secretary Yellen suggests that it reflects the strength of the economy, as reported by Bloomberg. However, \u200dher dismissal of the notion that this surge is a consequence of the U.S. budget deficit raises concerns.<\/p>\n<p>The U.S. Treasury&#8217;s recent auctions provide evidence contradicting Secretary Yellen&#8217;s claims. The five-year note auction, for\u2063 instance, drew a high yield of 4.23 percent and a bid-to-cover ratio of 2.27, which fell below the \u200caverage of 2.42. Similarly, during the most recent \u206330-year Treasury auction, bidders displayed their lowest interest in the long bond since 2021. \u200cPrimary dealers were forced to purchase nearly 18.2 percent of the auctioned debt. Consequently, the yield jumped to 4.86 percent before experiencing a flight to safety trade on Friday.<\/p>\n<p>It is\u200b important to note that \u200bprimary dealers are obliged to purchase the debt \u200cthat goes unpurchased by other bidders. The fact that they had to step in \u200cand\u200b acquire a significant portion of the debt suggests a lack of demand from other market participants.<\/p>\n<p>Secretary Yellen&#8217;s failure to acknowledge \u2064these developments raises concerns about her understanding of the bond market and the impact of rising yields. Ignoring the link between escalating debt issuances and the resulting strain on the bond market is \u200dan oversight\u2064 that could have long-term consequences for the U.S. economy.<\/p>\n<p>The rise in yields reflects growing concerns among investors about the sustainability of\u200c U.S. debt levels and the potential inflationary \u2063pressures that large-scale government spending can generate. Acknowledging these\u200c concerns and taking steps to address them would not only contribute to a healthier bond market but also help maintain investor confidence in the U.S. economy.<\/p>\n<h2>Related Stories<\/h2>\n<div>\n<h3>Treasury to Expand Bond Sales to Fund \u200bSoaring Government Spending<\/h3>\n<p>Published on\u2062 11\/1\/2023<\/p>\n<\/div>\n<picture><source type=\"image\/webp\" https: ><\/source><source type=\"image\/jpeg\" https: ><\/source><\/p>\n<\/picture>\n<div>\n<h3>Wall Street Opens Higher\u2062 as Treasury Yields Retreat, Earnings in Focus<\/h3>\n<p>Published on [date]\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Treasury Secretary Janet Yellen&#8217;s denial of the bond market&#8217;s stress and escalating debt issuance shows she&#8217;s &#8220;talking her book.&#8221; This Wall Street maxim is timely and accurate, highlighting her disregard for the increasing yields and their impact.<\/p>\n","protected":false},"author":2531,"featured_media":2087830,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2087829","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2087829","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2531"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2087829"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2087829\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2087830"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2087829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2087829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2087829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}