US Treasury Secretary Scott Bessent has repeatedly cautioned investors that they will face severe losses if they bet against him. He insists that whether it involves driving up oil prices, pushing down the yen exchange rate, or — most critically — lifting US Treasury yields, investors are making serious mistakes. That's because he stands on the opposite side of these trades, holding core information about government policy planning that investors cannot access.

The former hedge fund trader likes to describe this advantage in game theory terms as information asymmetry. In just the past three weeks, he has publicly mentioned this concept at least four times, including this Tuesday, when he told currency traders: "If you want to bet against me, go ahead."

Traders have already started doing just that — at least in the bond and crude oil markets, though not yet in the yen market, where the US has stepped in urgently to assist Japanese authorities. Since Bessent began his verbal campaign targeting these two major markets, their performance has run counter to his expectations — a critical development for American household livelihoods ahead of the midterm elections.

Benchmark crude oil prices have broken through $100 per barrel, pushing up retail gasoline prices at the pump. On Wednesday, he launched the first expanded bond repurchase operation intended to lower the benchmark 10-year Treasury yield — which serves as the rate basis for mortgages and various other loans — but Treasury yields instead surged higher, extending a two-week selloff and hitting 4.85%, a three-year high.