U.S. Treasury Secretary Bessant: Europe's selling of U.S. debt is a

# Source: Wall Street Insights

By Zhao Ying

Yellen stated that the nominee for the Federal Reserve Chair could be announced as early as next week, with four highly potential candidates in the running. Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, has garnered attention recently. Regarding market concerns over EU retaliatory measures, Yellen said that Europe has not discussed selling U.S. Treasury bonds, and European countries will definitely continue to hold U.S. Treasury securities.

U.S. Treasury Secretary Yellen dismissed claims that European countries might sell off U.S. Treasury bonds, and revealed that the Trump administration could announce the nominee for the new Federal Reserve Chair as early as next week. The statement aims to stabilize market confidence in demand for U.S. Treasuries while providing a clear timeline for the leadership transition at the Fed.

According to media reports, Yellen told reporters in Davos on Tuesday that the notion of Europe dumping U.S. Treasury bonds is "completely illogical", adding that there is "no such discussion at all" in Europe. She called it a "false narrative" and said she "strongly opposes" such claims.

The Treasury Secretary also confirmed that President Trump "could announce the nominee for the new Fed Chair as early as next week", with "four outstanding candidates" currently under consideration. Earlier, Yellen had stated that Trump plans to make the decision in January, around the time of the World Economic Forum in Davos.

The incoming chair will take over a central bank caught in a tug-of-war between institutional independence and administrative demands. Over the past year, incumbent Chair Jerome Powell has been repeatedly criticized by Trump over the pace of interest rate cuts. The market fears that the political leanings of the new chair could trigger volatility in the bond market and impact the U.S. dollar's trend.

## Claims of U.S. Treasury Sell-off Dismissed

Yellen explicitly denied recent market rumors that European countries might sell U.S. Treasury bonds during her appearance in Davos. According to Bloomberg, the Treasury Secretary said "there is no such discussion in Europe" and described such claims as "completely illogical".

She responded to the rumors in strong terms, stating that she "could not disagree more strongly" with the idea. The statement is intended to shore up market confidence in the outlook for U.S. Treasury demand, especially against the backdrop of close attention to the moves of the world's major creditors.

She also noted that Europe is a hub of regulatory fragmentation, urging all countries to abide by trade agreements.

## Fed Chair Nominee to Be Revealed Soon

The Trump administration is accelerating the process of the Fed leadership transition. Yellen disclosed that the President could announce the nominee for the new chair as early as next week, with four candidates under consideration. The shortlist includes Rick Rieder of BlackRock, Kevin Hassett, Director of the National Economic Council, Federal Reserve Governor Christopher Waller, and former Governor Kevin Warsh.

Hassett, once seen as the front-runner, faced public hesitation from Trump last week. At a White House event, Trump told Hassett: "If you want to know the truth, I actually want to keep you in your current position." The remarks reflect the administration's concern about losing an important mouthpiece for economic policy, though it remains unclear whether this signals a genuine shift in internal deliberations.

Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, has been gaining traction recently. According to sources familiar with the matter, he is believed to face relatively less resistance in the Senate confirmation process, a crucial consideration amid the current political climate.

Wall Street is closely monitoring the market impact of the nomination. Investors generally agree that the Fed Chair's ability to achieve inflation targets while fending off political interference is a key factor for global financial stability. If the new chair is perceived by the market as more politically aligned, it could spark volatility in the bond market and exert pressure on the long-term trend of the U.S. dollar.

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