Trump focuses on the 10-year U.S. Treasury yield, what does Bostic's speech mean?

Citigroup believes that Scott Bessent's statement regarding the 10-year Treasury yield may imply that tariffs and fiscal policies will be constrained. On Wednesday local time, U.S. Treasury Secretary Scott Bessent stated in a media interview that the Trump administration is more focused on the 10-year U.S. Treasury yield for lowering borrowing costs rather than the Federal Reserve's short-term benchmark interest rate. When asked whether Trump wants to lower interest rates, Bessent said, "President Trump and I are both focused on the 10-year U.S. Treasury; he is not pressuring the Federal Reserve to lower rates." In a report on February 6, Citigroup stated that lower inflation and deficit expectations help reduce long-term yields, which may limit the expansionary nature of tariffs and fiscal policies. Currently, tariff policies are partly aimed at addressing the fentanyl issue, and the future implementation of comprehensive tariff policies may consider balancing fiscal revenue with the need to control inflation. Regarding fiscal policy, there are currently differences between the U.S. Senate and House of Representatives on fiscal plans. Senator Lindsey Graham plans to advance a fiscal bill that includes defense and border security spending, offset by spending cuts; extending tax cuts will be addressed in a second coordinating bill. Meanwhile, House Speaker Mike Johnson insists on a single-bill strategy and believes that the bill passed by the House will serve as the basis for the final proposal. Notably, Bessent expressed hope for reducing inflation through lower energy prices during the interview. Bessent stated that expanding energy supply can lower inflation, and for the working class, "energy costs are one of the most reliable indicators of long-term inflation expectations."