Scott Bessent Dismisses French Bond Turmoil Spillover Risks
Treasury Secretary Scott Bessent says French bond market instability will not impact U.S. markets and outlines plans to end Fannie Mae and Freddie Mac conservatorships.
U.S. Treasury Secretary Scott Bessent stated on Tuesday that he does not expect the current turmoil in the French bond market to spill over into U.S. markets. France is currently facing rising yield gaps compared to German bonds and increased debt pressure following violent protests and difficulties in containing its budget deficit.
Bessent noted a "flight to quality" into U.S. Treasuries as investors move away from more concerning countries. He defended the performance of the U.S. bond market under President Donald Trump, citing strong recent auctions. Regarding domestic concerns, Bessent addressed high U.S. mortgage rates driven by energy shocks from the war with Iran, expressing confidence that these rates will eventually decline.
In a broader policy update, Bessent announced that the Trump administration plans to end the government conservatorship of Fannie Mae and Freddie Mac within the next one to two years. He also confirmed his intention to remain in his post as Treasury Secretary through the end of the presidential term.
