Two charts can illustrate the recent market sentiment regarding capital.

1. 10y rises, yen appreciates.

2. The swap rates are rising, while the interest rate spreads are falling.

Two facts point directly to:

1) Funds are unwilling or are currently leaving U.S. Treasuries.

2) It is a repricing of fiscal shocks. To put it bluntly, it's not that your interest rates are not attractive enough, but whether you can afford to pay it back.

3) Funds avoid high risks, rather than high interest rates being unattractive.

In simple terms, the 10-year U.S. Treasury yield is roughly equivalent to the cost for the U.S. to attract foreign investment, in the context of sustained and maximal net external liabilities. This means:

In the past, you could attract foreign investment with a 2% cost when issuing $100 bonds, but now you need 5% or even higher. This is a repricing of the credit risk itself due to the deterioration of the fiscal deficit.

What should Besent do at this time?