Michael Howell says Bessent isn't fighting yields with $6B of buybacks, he's lowering volatility so the basis trade does it for him "You've got to start to think about, you know, what's going on in a world where collateral is very important. And 2 of the key indicators of, let's say, deteriorating collateral is the rise in bond volatility through the MOVE index, which, to my mind, is way, way more important than the Fed funds rate, because that determines the collateral multiplier, and basically the whole credit system." "The other thing is basically what the Fed itself is doing in terms of money markets and allocating liquidity into the repo markets. At the moment, that's pretty quiescent. That's not a problem. But we saw basically many episodes in the last 2 years that that could blow up as well." "The problem in the backdrop is you're starting to see this progressive tightening through the collateral markets, through the rising US dollar." "What Scott Bessent is trying to do is to manage volatility as best he can. You know, a lot of the media have been way off on what he's trying to do, suggesting that, you know, $6 billion of buybacks is going to try and suppress yields. I mean, that's just bonkers." "Bessent's a clever guy. He's not that foolish. What he's trying to do is to dampen volatility. And that's the name of the game. If you dampen volatility, you can encourage more of the basis trade, which is going to help to depress yields generally." "He's not trying to buy back to push yields down directly, that's for sure. Yeah. Keep volatility low. That's what you've got to do. Treasury markets are all important."