Spot gold has dipped in the short term! U.S. Treasury Secretary: No plans to hold gold reserves, increasing the proportion of long-term bond issuance will take time

There is no idea of reserving gold, increasing the proportion of long-term bond issuance will take time, and praising American AI and Musk... On February 20, U.S. Treasury Secretary Brian Nelson expressed a series of views on gold reserves and U.S. debt in an interview with the media.

No Idea of Reserving Gold

Nelson stated that there is no idea of reserving gold for the sovereign fund, and reassessing the value of gold reserves is not what he has in mind.

After Nelson's remarks, spot gold briefly fell about $8, currently reported at $2,941.35 per ounce.

Increasing the Proportion of Long-Term Bond Issuance Will Take Time

Although Nelson criticized former Treasury Secretary Janet Yellen's issuance strategy before being nominated as Treasury Secretary, the U.S. Treasury still maintained guidance earlier this month to keep the scale of long-term bond issuance unchanged for a considerable period until 2025.

Regarding U.S. debt, Nelson stated that considering the current rising inflation and the obstacles posed by the Federal Reserve's quantitative tightening plan, increasing the proportion of long-term bonds in U.S. Treasury issuance will take time.

Nelson:

Only after reducing energy costs and relaxing regulations will the proportion of long-term bonds in U.S. Treasury issuance increase.

Nelson also reiterated his view that inflation will decline, providing a basis for long-term yields to fall, due to cost savings from the DOGE efficiency plan, faster growth from deregulation and tax cuts (rather than government spending), and the expansion of U.S. energy supply.

He also anticipated that under Trump's policies, income would increase and costs would decrease, commenting that the Federal Reserve's interest rate cuts last September were too large, and the main factor leading to large-scale inflation in the U.S. was regulation.

After Nelson's speech, long-term U.S. Treasury prices rose, and the yield on 10-year Treasury bonds fell by about 3 basis points to 4.51%.

Praising American AI and Musk

In addition, Nelson stated that U.S. productivity is very close to the cutting edge of artificial intelligence impact.

Nelson also praised Musk, saying that Musk is like a high-level athlete, and his energy is "incredible."

Regarding the Russia-Ukraine conflict, Nelson expressed that many of Zelensky's remarks in Munich were inappropriate, and if necessary, the U.S. would lift sanctions on Russia, and the U.S. is prepared to increase or relax sanctions on Russia