Bessent's "Toolbox" Fails Against Oil and Weak Consumption Double Squeeze; Goldman Sachs: "Markets Smell of Stagflation"

Goldman Sachs believes Bessent's attempts to stabilize the long-end bond market through expanding Treasury buybacks and advancing fiscal consolidation have fallen short, as long-term bond yields briefly declined before quickly rebounding, with policy tools still unable to resolve fiscal and supply-demand pressures. Meanwhile, stagflation signals have intensified: oil prices surged over 7% in a single week, the 10-year breakeven inflation rate rose nearly 10 basis points over two weeks, while consumption continues to cool—Walmart's same-store sales growth fell to a six-year low of 2.6%, and the "stagflation basket" rose 6.7% this week.