Exclusive: Treasury Sell-Off Mounts—Expert Says Scott Bessent Can Hold Off 'Bond Vigilantes'

While foreign central banks have rapidly liquidated $82 billion in U.S. Treasuries amid the Middle East conflict, according to a FT report, top financial experts are dismissing fears of a market collapse. A ‘Feared’ Defense Against Bond Vigilantes While the sudden offloading of U.S. debt by oil-importing nations has raised international alarms, Louis Navellier, founder and chief investment officer of Navellier & Associates, considers the drop largely “insignificant” at this time. He argues that opportunistic traders looking to capitalize on the nation’s $39 trillion debt load will be stopped in their tracks by the current Treasury leadership. “Treasury Secretary Scott Bessent is very well respected and even feared around the world, since he helped George Soros make $1 billion on the prediction that the Bank of England would have to unwind its currency peg,” Navellier told Benzinga. While there are “bond vigilantes” preying on the demographic woes of Japan, Britain, and France, Navellier noted that Bessent is fully expected “to make sure that the bond vigilantes do not successfully attack U.S. Treasury securities.” The Dollar Remains An ‘Oasis’ Currently, the 10-year Treasury yield has settled at 4.29%. Navellier attributes recent yield increases to lackluster domestic Treasury auctions rather than foreign liquidations. Despite geopolitical turbulence, he emphasized that the U.S. dollar and gold “remain an oasis for international investors,” backed by superior GDP growth, higher real interest rates, and stronger demographics than European and Asian counterparts. As of Tuesday’s close, the U.S. Dollar Index spot was 0.24% lower at the 99.7190 level. While its tracker, Invesco DB U.S. Dollar Index Bullish Fund (NYSE:UUP) closed 0.71% lower on Tuesday, with a 2.77% yera-to-date gain. ‘Recycling’ Loop Fears that this Treasury dump will create a destructive cycle of a strengthening dollar and further sell-offs are also being brushed aside by economists. Enrique Diaz-Alvarez, Chief Economist at Ebury, explained that the market naturally self-corrects. “A lot of the sales must be recycled back to USD via oil purchases [and] currency interventions, so the purchasers of these USD will replace a significant part of the sales,” Diaz-Alvarez told Benzinga. He added that the loop “is not a vicious one,” noting that while some nations may pressure institutions to sell U.S. equities to protect local currencies, the impact remains minor. Ultimately, U.S. equities have continued to outperform the rest of the world since the conflict escalated. US Markets In 2026 The S&P 500 index has declined 4.81% YTD and was 6.77% below its record of 7,002.38 points as of Tuesday’s close. Similarly, the Nasdaq Composite index was down 7.08% YTD and 10.11% lower from its record of 24,019.99 points. On the other hand, Dow Jones tumbled 4.22% YTD and 8.26% lower from its last record of 50,512.79 points. The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq 100 indices, respectively, closed higher on Tuesday. The SPY was up 2.91% at $650.34, while the QQQ advanced 3.39% to $577.18. Meanwhile, Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), gained 2.46% to close at $463.19 on Tuesday. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock