By Stefano Rebaudo and Tom Westbrook

(Reuters) – U.S. Treasuries rallied on Monday as investors cheered the selection of Scott Bessent as Treasury Secretary, who is expected to keep a leash on U.S. deficits and deliver a moderate approach on tariffs.

Bessent is seen as a voice for markets in incoming U.S. President Donald Trump’s administration and as a fiscal conservative.

Benchmark 10-year U.S. Treasury yields, up 80 basis points since September, fell 6 basis points to 4.35%, after hitting 4.326%, the lowest level since Nov. 12.

Two-year yields fell 1.5 bps to 4.35% and 30-year yields were down 7 bps at 4.52%.

Yields fall when bond prices rise.

“Investors prefer orthodoxy, predictability, and coherence from economic policy; there were fears that some of the candidates may not possess those attributes,” said Paul Donovan, chief economist at UBS Global Wealth Management.

“Others in the cabinet disagree, but investors will be pleased there is one voice of trade tax moderation,” he added.

Bessent will prioritize delivering on election tax cut pledges, he told the Wall Street Journal in an interview published on Sunday.

Market participants also recalled his comments in an interview earlier this year when he suggested trade tariffs would be a negotiating strategy and the policy might not be to simply impose across-the-board tariffs in one big swoop.

“The market view is that Bessent is a ‘safe hands’ candidate,” said Stephen Spratt, strategist at Societe Generale.

Investors have fretted for weeks about a potential rebound in inflation and an increase in the federal budget deficit from Trump’s economic plans, such as tax cuts and import tariffs.

“Our view on this selection is that we should not read too much into this choice,” said Derek Halpenny, head of research, global markets at MUFG.

“The Treasury Secretary position is hugely important but is not the person who will design the finer details of the strategy on trade-tariff implementation,” he added.

If sustained, the current rally would be one of the biggest for the bond market in several weeks and may have wrong-footed momentum funds following months of rising yields.

“My sense is that this (rally) is also a function of positioning after the rise in yields and dollar strength over the last six weeks,” said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore.

Pricing for near-term interest rate cuts in the United States, which has pushed out over recent weeks on signs of a strong U.S. economy, was little changed. Markets priced about a 50% chance of a 25-basis-point cut at the U.S. Federal Reserve’s December meeting.

(Reporting by Stefano Rebaudo and Tom Westbrook; Editing by Kate Mayberry, Emelia Sithole-Matarise and Mark Heinrich)

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