Prediction market traders skeptical Bessent will send yields lower

Treasury Secretary Scott Bessent is seeking to cap rising yields using a variety of tools at his department’s disposal. However, traders on prediction market platforms think these moves won’t lead yields to fall dramatically.

Traders on Kalshi think there’s a 56% chance that the 10-year Treasury note yield will end 2026 above or at 4.75%, though they also place just 27% odds that it finishes the year above 5%. As of midday trading Monday, the 10-year yield was trading at about 4.7%.

Traders on Kalshi are asked across a series of contracts about where they think the 10-year Treasury note yield will trade on Dec. 31. The contracts are resolved using data from the U.S. Treasury.

Volume on the contracts are low, though, at just over $16,500 traded.

On Polymarket, speculators place 2-in-3 odds that the 10-year Treasury note yield will cross 4.8% at some point in 2026, a level that it hasn’t breached even amid a recent bonds sell-off. The contracts on Polymarket are also resolved using official data from the U.S. Treasury. 

Last week, global bonds experienced a sell-off as markets assessed the risk of potentially higher inflation while the U.S.-Iran conflict remains unresolved. U.S. national debt also crossed $40 trillion last week, putting further pressure on domestic yields. 

In response to the sell-off, the Treasury Department announced it would double buybacks of U.S. debt to stabilize the bond market. Yields initially fell on the news, then rose again in the days after the announcement. 

On Monday, CNBC reported that the Treasury may consider using its $1 trillion General Account to help fund its increased buybacks, according to senior officials. 

Yields, again, declined after the report. But prediction market traders are betting that, once more, yields’ fall will be temporary and they’ll resume marching higher. 

Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.