US Treasury Secretary Scott Bessent told a Capitol Hill hearing on Tuesday that the US can have a productive relationship with China. He said the US-China relationship is in a comfortable place, and that competition helps prevent stagnation.
He said the Trump administration wants a strong partnership with Venezuela. He added that this could eventually lead to free and fair elections.
Monetary Policy And Productivity Outlook
Bessent said the Federal Reserve, under Kevin Warsh’s leadership, would watch for any timing mismatch. He also said that productivity booms often lead to employment booms.
He said the US will see what happens with Iran. He added that he is optimistic about the Russia-Ukraine situation.
The positive comments on US-China relations may reduce market volatility. With the VIX index in the low teens—well below the averages seen in 2025—selling options to collect premium may look appealing. Traders could consider strategies such as selling cash-secured puts on major indices.
This optimism also shows up in trade data. Two-way trade between the US and China rose 4% in the final quarter of 2025. This is especially helpful for semiconductor and technology firms, which are sensitive to trade tensions. Call options on technology-focused ETFs could be one way to benefit from this stability.
Jobs Inflation And Risk Assets
The idea that a productivity boom can lead to an employment boom appears to be playing out. The January 2026 jobs report showed more than 225,000 new jobs. With core inflation steady at 2.9%, the Fed is not under immediate pressure to act. That supports risk assets. In this context, long-dated equity index futures may be a sensible position for the coming weeks.
A potential partnership with Venezuela could add more oil supply to global markets and push prices lower. West Texas Intermediate crude has already fallen below $80 per barrel, a level not seen since last fall. Traders may look at buying put options on oil futures to position for more weakness.
However, uncertainty around Iran still creates a need to hedge against a sudden jump in energy prices. That means the main view may be bearish on oil, but holding some low-cost, out-of-the-money call options on energy stocks could help protect against unexpected events. Bessent’s optimistic view on the Russia-Ukraine situation also supports a broader “risk-on” tone for European markets.
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