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Empowered Funds LLC Has $136.61 Million Stock Position in JPMorgan Chase & Co. $JPM

Behind Bessent Moves, Wall Street Sees Sign of Bond-Market Angst

(Bloomberg) -- Wall Street traders and strategists say US Treasury Secretary Scott Bessent is sending fresh signals that he's eager to keep bond yields from spiking higher. Most Read from Bloomberg Trump Amps Up Pressure on Billionaire Sargeant to Exit Venezuela Iran Says Hormuz Deal Close But Its Conditions Must Be Met OpenAI's New Device Will Be Hockey Puck-Sized and Cost Over $300 America's Cyber Forces Grapple With Cluster of Deaths by Suicide Walmart Tests Fulfillment Cart Changes After Child Hit in Store Over the course of a week, he took steps that they see as aimed at easing pressure on the Treasury market after long-term rates surged to a 19-year high, pushing up costs for everyone from homebuyers to vast swaths of corporate America. First, he staged the US's first currency intervention to prop up the yen since 1998, mitigating the risk that Japan would dump US government bonds to raise the dollars needed to buy the currency on its own. And he pointed to a Federal Reserve facility that Tokyo could tap in the future. Then at last week's quarterly bond sales announcement, a subtle and unexpected change to his department's guidance was seen as opening the door to potential cuts in long-bond sales. Bessent has also been taking to the airwaves and social media to defend the new communications strategy of Federal Reserve Chairman Kevin Warsh, who caused yields to surge after last month's meeting when he failed to explain how — or when — the central bank may act to bring down inflation. Taken together, the moves indicate that Bessent is attempting to do what's in his power to stem the ascent of long-term bond rates, which have climbed due to persistent inflation and nearly $2 trillion annual budget deficits that are resulting in an ever-increasing supply of new debt. "The Fed and the Treasury have to be getting concerned about the level of long-end rates," said Priya Misra, portfolio manager at JPMorgan Asset Management. "The intervention with Japan, support for Warsh and a possible reduction in long-end supply can be attempts for Treasury to signal that they are aware of the rate-market move and do not hesitate to use the different tools at their disposal." In the end, Bessent's influence is limited, given the bigger forces at work. On Friday, Treasury yields dipped after a Labor Department report showed significant weakening in the job market, a sign the economy is cooling. A lower-than-expected rise in the consumer-price index on Wednesday could reinforce the market's move. Story Continues Yet the Treasury's actions were seen as a sign that it's willing to do what it can to get borrowing costs lower, which President Donald Trump has repeatedly said is a priority. Spokespeople for the Treasury didn't respond to a request for comment. Early last year, after Trump's return to the White House, Bessent said the administration's main focus was on lowering 10-year yields, which serve as a baseline for mortgages and other types of loans. He said its fiscal policies would help accomplish that goal by reducing government spending, helping to ease inflation. In November, while referring to his job as "the nation's top bond salesman," Bessent, a former hedge fund manager, said Treasury yields are a "strong barometer for measuring success." But the adminstration's spending cuts had little impact and its tax reductions will add significantly to the government debt in the coming decade. The attacks on the Fed from Trump, who last week revived his threat to fire Governor Lisa Cook, have worried investors by jeopardizing the central bank's independence. And the Iran war's oil-price spike has created a fresh inflation shock that's helped push the 10-year yield up to around 4.65%, higher than it was at the start of Trump's second term. "With the spending policy that's been adopted and the war, it's going to be hard to relieve pressure on the long end," said John Velis, US macro strategist at BNY. Against that backdrop, the Treasury's recent

JPMorgan Was a Broker to AI Hedge Fund Situational Awareness— Now Jamie Dimon Is Warning About Hidden Leverage Risk: 'Margin Debt Is the Highest...'

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. JPMorgan Chase & Co. CEO Jamie Dimon warned that high leverage across financial markets could magnify disruptions, urging investors to be aware of hidden borrowing risks. On Wednesday, in an interview with CNBC's Leslie Picker, Dimon said, "Margin debt is the highest it has ever been." He said that there is significant leverage in the market that isn't reflected in official margin debt figures because it is "hidden" under other forms of borrowing. Dimon warned that high leverage across prime brokerages, hedge funds, ETFs, and Treasury arbitrage strategies has increased the risk that a single investor or fund could trigger rapid market volatility. Don't Miss: A single bad hire can set a startup back years. Here are the 5 hires founders most often misjudge — and why Still Learning the Market? These 50 Must-Know Terms Can Help You Catch Up Fast "When you have that, you do have a higher chance that somebody will disrupt the market in a quick way, and people get rattled over it," said the JPMorgan CEO. However, Dimon said current economic conditions differ from the 2008 financial crisis, noting that leverage by itself does not create "systemic" risk. He also cautioned that persistent demand for capital, driven by government deficits, infrastructure spending, and global military buildup, could fuel inflation and keep long-term interest rates elevated. "When volatility goes up, clearing houses and banks generally ask for more collateral…So you'll probably see a little bit of that," he said. AI Fund Collapse Tests Markets Dimon's remarks come as concerns grow over financial market risks, driven by high stock valuations, record hedge-fund leverage, and large Treasury basis trades. Last month, AI-focused hedge fund Situational Awareness suffered steep losses after leveraged technology investments backfired, triggering margin calls and forcing the fund to sell off much of its public-equity holdings. Trending: Avoid the #1 Investing Mistake: How Your 'Safe' Holdings Could Be Costing You Big Time Ross Gerber said the collapse of former OpenAI researcher Leopold Aschenbrenner's AI-focused hedge fund was driven by excessive leverage, not flaws in the AI investment thesis. He warned that leverage can rapidly magnify losses, calling the fund's downfall a lesson in leverage, hubris, and inexperience. Former hedge fund manager Martin Shkreli said Wall Street's trading dynamics, not just falling valuations, are accelerating the AI stock selloff. He argued that when heavily leveraged funds face margin calls, rival traders often intensify the pressure by shorting related stocks, forcing liquidations. Shkreli noted that a fund using 4x leverage can be wiped out by a 25% decline, prompting prime brokers to seize and liquidate positions to limit their own risk. Story Continues Meanwhile, Dimon said the collapse of Situational Awareness showed that financial markets were resilient enough to absorb the firm's failure without causing broader market disruption. Notably, JPMorgan was one of the main brokers for Situational Awareness. Image via Shutterstock Read Next: Skip the Regrets: The Essential Retirement Tips Experts Wish Everyone Knew Earlier. Think you're saving enough for your kids? You might be dangerously off — see why Building Wealth Across More Than Just the Market Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That's why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn't tied to the fortunes of just one company or industry. Arrived Backed

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