Treasury Secretary Scott Bessent can declare victory over the bond market but only for a couple of days.

Yields on U.S. government debt are down sharply since the administration's controversial intervention in the bond market but that owes more to fragile hopes of peace in the Middle East than a lasting resolution to worries about too much borrowing.

Just days after Bessent's pledge to increase the size of government bond buybacks, the 10-year Treasury yield recorded its largest one-day decline in more than a month on Tuesday. Resurgent tech stocks helped the market shrug off the threat of a renewed U.S.-Canada trade war.

So mission accomplished for Bessent? Well, not exactly. The fall in bond yields had more to do with reports of potential progress on a deal to reopen the Strait of Hormuz and the associated drop in oil prices than the so-called "Treasury Twist." That means the move could just as easily reverse if Middle East tensions flare up again.

The inflation conundrum persists for markets and the Federal Reserve. While Bessent may have greater insight into the chances of a lasting peace than the average investor, it would be a big risk for Fed Chairman Kevin Warsh to rely on lower oil prices to address inflation which remains stubbornly above the central bank's 2% target. Arguably Bessent's intervention has only raised the stakes for Warsh's speech at the Jackson Hole conference on Friday, where he will be under pressure to clarify what it will take to raise rates.

Lower energy prices are handy but unless the market gets reassurance about Fed independence and the scale of government borrowing, inflation concerns and spiking yields are set to return. Bessent better not put away his bond bazooka for good.