The Trump administration may not be rushing to rescue markets this time. That was the message from U.S. Treasury Secretary Scott Bessent, who downplayed concerns over recent asset price declines, describing market corrections as healthy and normal.
Speaking on NBC’s Meet The Press, according to Bloomberg Bessent signaled that the long-assumed ‘Trump Put’, a policy stance supporting markets may require a deeper downturn before intervention occurs.
“I’ve been in the investment business for 35 years, and I can tell you that corrections are healthy, they are normal,” Bessent said. “I‘m not worried about the markets. Over the long term, if we put good tax policy in place, deregulation, and energy security, the markets will do great.”
His comments suggest a higher tolerance for economic volatility before the administration steps in, challenging market expectations of quick government support.
Bessent’s remarks arrive at a time when equity markets and crypto assets are under pressure.
- The S&P 500 and Nasdaq officially entered correction territory last week, falling over 10% from February highs amid fears that Trump’s new tariffs could slow economic growth and drive persistent inflation.
- Bitcoin (BTC), which surged to $109K in January, has plunged 25%, disappointing investors hoping for fresh BTC purchases under Trump’s Strategic Digital Assets Reserve plan.
The downturn has fueled calls for intervention, especially from the crypto community, which is anticipating new pro-crypto policies. However, Bessent’s tone suggests that Washington may let markets endure more pain before stepping in.
A Shift in the ‘Trump Put’?
Historically, investors have expected the Trump administration to aggressively support financial markets. However, both Trump and Bessent appear to be signaling a shift in strategy.
- Trump recently distanced himself from market movements, stating that he is “not looking at the stock market.”
- Bessent’s focus is on long-term economic strategy, emphasizing tax cuts, deregulation, and energy security over short-term market relief.
- The Federal Reserve is in no rush to cut rates, with Chair Jerome Powell and other Fed officials waiting to see the full effects of Trump’s economic policies.
This stance could reshape investor expectations, leading to increased market volatility without immediate support.
Interest Rates and the 10-Year Yield
While markets clamor for stimulus, the Trump administration’s economic team appears more concerned with bond yields than stock prices.
Bessent has previously stated that the administration’s priority is bringing down the yield on the 10-year U.S. Treasury note, which directly affects:
- Mortgage rates
- Corporate borrowing costs
- Long-term economic stability
With the Federal Reserve meeting this week for a policy review, the key question remains: Will rate cuts come soon, or will Powell stick to his patient approach?
What This Means for Investors
If Bessent’s comments indicate policy direction, investors should prepare for a more hands-off approach from the administration regarding short-term market support.
- Stock market declines may need to deepen before any intervention.
- Bitcoin’s recent slide may not prompt immediate policy action.
- The focus remains on bond yields and economic fundamentals rather than quick-fix stimulus.
As investors await the Federal Reserve’s decision on Wednesday, the message from Washington is becoming clearer:
This time, the ‘Trump Put’ may not be as immediate or as generous as before.
