Safe Haven Status, Retail Wrap Up, and Crypto Comeback 8/21/26

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**Kelly Evans** (0:57)
You're listening to The Exchange. Here's today's show.
Thank you very much, Scott. The stocks are moving higher today, but so are bond yields as Bessent's bond buyback rally fizzles out. Welcome to The Exchange. I'm Kelly Evans, and we have Treasury yields hovering near their highest levels in over a decade. Despite the Treasury's effort to curb them, you see the 10-year 473 today, 527 for the 30s climbing back up towards 533 Now, stocks are taking the move in stride, but the S&P and NASDAQ are still on pace to snap a three-week win streak. Also, breaking a three-week win streak are the semis, although they are attempting to rally today. Currently down about three-quarters of 1%.
Bitcoin, meanwhile, on pace for its best week in three years. But our guest says this may be more about the dollar than any crypto fundamentals. Maybe it's a mix of both, up 6% again to 77k today. And if you missed it and the debt drama, the economy seems to be humming along. Today's number showing US business activity grew at the fastest pace in over four years, fueling a wave of hiring, in fact. And don't forget yesterday's Philly Fed survey hitting a five-year high. We'll speak with Jay Timmons of the National Association of Manufacturers about the resurgence. But we begin with the Treasury market, where investors are sending a clear message to the Treasury, we're in charge. This battle between Bonds and Bessent is playing out seven days before Fed Chair Warsh speaks at Jackson Hole, following what he called a family fight at July's Fed meeting. So how much breaks out into the open? And did Treasury Secretary complicate the Fed chair's next move? Well, Steve Leesman joins us now for more details on that. Hi, Steve.

**Steve Leesman** (2:39)
Kelly, good afternoon. Markets seem likely to get somewhat more from new Fed Chairman Kevin Warsh next week in Jackson Hole on the outlook of the economy, more than they've gotten from him so far in Washington. The chairman, meanwhile, faces new challenges from higher bond market rates. And of course, this move by the Treasury Secretary. Expectations for the new Fed Chairman's first keynote of the conference. They include more detail on the economic views and the rate outlook and task force updates, of course, and clear statements, hopefully, on inflation and his reaction to them. Trying to dispel any notion that he's unwilling to hike rates and he's a dove when, in fact, many people think he's really a hawk. Warsh would be making a distinction between the detail he gives after a press conference when he's speaking for the committee and what he might say on his own for himself. Many in the market at least hope so.

**SPEAKER_5** (3:31)
I just think we need to know the reaction function.
I just think we need to know, what are you looking at? What is important to you today? Is it more inflation? Is it more employment? Are you looking at, by the way, there's a series of indicators in employment. Are you looking at demand supply? Are you looking at a whole series of different indicators? To get some clarity on that, then markets can do their job in interpreting it and putting a price on that.

**Steve Leesman** (3:56)
Markets doing a job in the bond market, the 10-year and the 30-year yields, both now trading above the levels when the Treasury Secretary announced the surprise buybacks that were not scheduled. The two-year higher by more perhaps reflecting the understanding at the buybacks on the long end will likely be financed with borrowing from the short-term debt. This issue and more in the Outlook for Rates are going to be part of our full coverage from Jackson Hole that will include several newsmaker interviews. And that begins Wednesday with a special edition, Kelly, of the CNBC Fed Survey.