Bessent, per his "3 Arrows" plan: If we get oil down (blue, RS), 10y UST yields will follow (red, LS), and then we can term out US debt.
"Life is what happens to you while you're busy making other plans." -John Lennon
In a way, President Trump may actually "want" a recession.
A recession achieves MOST of Trump's economic goals at once:
1. Lower US inflation
2. Lower treasury yields
3. Lower trade deficit (through tariffs)
4. Fed interest rate cuts
5. Lower oil prices
After the recent surge in Treasury Yields, the Trump Administration has realized the trade deal headlines won't work anymore. A recession may be the "best" solution after years of inflation and "free" money.
...the problem with a recession is that it might not stopped being just a mild recession.
...there are so many skeletons (CRE loans, student loans, auto loans, private equity, margin debt) in the closet that could implode when recession hits and equity markets collapse. Systemic risks are not unfounded, they are lurking, just like the Lebanese warehouse that I told you about that is filled with explosive chemicals in drums waiting for the spark.
