U.S. Treasuries rallied on Monday, trimming yields by over 10 basis points across five- to 30-year maturities, as markets reacted positively to the announcement of Scott Bessent as President-elect Donald Trump's Treasury secretary pick. Investors view Bessent, a Wall Street veteran and head of Key Square Group, as a moderating force on Trump's more aggressive trade and economic policies. The dollar fell sharply, losing 0.7%, as Bessent emphasized a balanced approach to tariffs and pledged to maintain the dollar's global reserve status while implementing Trump's tax cut agenda.

Bessent's nomination contrasts with Trump's trend of appointing unorthodox candidates and loyalists to key positions. His approach to fiscal policy, which includes limiting reliance on Treasury bills and focusing on tax reform, has been welcomed by market strategists. However, the potential for trade wars and tariffs remains a key concern. Yields on 10-year Treasuries dropped to 4.28%, the lowest since Nov. 8, as traders revised expectations for Federal Reserve rate cuts in 2025, pricing in 73 basis points of easing by year-end.

Market Overview:

• U.S. Treasuries rallied, with yields falling over 10 basis points across key maturities.
• The dollar slid 0.7% as markets welcomed Scott Bessent's Treasury nomination.
• Bessent emphasizes gradualism in tariffs and balancing fiscal priorities.

• Bessent's nomination contrasts with Trump's more unorthodox cabinet picks.
• Yields on 10-year Treasuries hit 4.28%, the lowest level since early November.
• Bond traders adjust rate cut expectations amid inflationary fears.

• Bessent's confirmation process may clarify his approach to economic policy.
• Market sentiment hinges on U.S. Treasury priorities and global growth trends.
• Potential Middle East cease-fire and oil prices may further influence yields.

Scott Bessent's nomination has eased market concerns, offering a counterbalance to fears of aggressive trade measures under the Trump administration. His focus on gradualism in tariffs and maintaining the dollar's reserve currency status aligns with Wall Street's hopes for fiscal stability. The rally in Treasuries and declining yields reflect optimism that Bessent will moderate policy risks while advancing Trump's tax reform plans.

As bond and currency markets digest Bessent's appointment, broader economic trends and geopolitical developments will continue to shape market dynamics. The focus will remain on how effectively his fiscal strategies address inflation, support growth, and sustain investor confidence amid global uncertainties.