Investor Warnings Spark Debate Over Treasury Secretary’s Bond Buyback Plan
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That, in turn, has caused a sharp spike in both 10-year and 30-year yields (the 10-year yield hovering around 4.7% and the 30-year comfortably above 5%), prompting Bessent’s recent actions to support bond prices.
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CNBCLong-duration bonds are bearing the brunt of a near year-long rise in yields that extended to 19-year highs in the 30-year last week after Treasury Secretary Scott Bessent upped the government's bond buyback. The 10-year note yield however, is still under its high from January 2025 and the 5% level it pierced in 2023.
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Bonds, meanwhile, are still getting plenty of attention after respected investor Stanley Druckenmiller joined a crowd in warning that Secretary of the Treasury Scott Bessent’s plan to buy back longer-term Treasury bonds to lower yields won’t achieve its goal.
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New York Post BusinessTreasury Secretary Scott Bessent is determined to put the “fear of God” into the so-called “bond vigilantes” who have been dumping US Treasurys and sending interest rates soaring, according to a private sector economist with knowledge of his thinking.
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Now Druckenmiller is invoking the same logic against Bessent, who has crossed from the trading desk to the Treasury Department. He used the Wall Street Journal opinion page to call out his former protege. But, perhaps unprecedentedly, he did so with an AI-assisted essay. Jeff Stein, the Pulitzer-winning former chief economics correspondent for the Washington Post, wrote on X that he contacted Druckenmiller, who responded “of course” he used AI to write the essay: “There’s a reason I moved from an English major to being an economics major. I’m not embarrassed by it.” Druckenmiller could not be immediately reached for comment by Fortune. The Treasury Department did not respond to a request for comment.
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New York Post BusinessBillionaire investor Stanley Druckenmiller admitted Tuesday that he used AI to pen a scathing Wall Street Journal op-ed bashing Treasury Secretary Scott Bessent’s debt buybacks.
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The Treasury Department announced on Aug. 19 that it would double the size of its long-dated bond buybacks, from $2 billion to at least $4 billion per operation, aimed at the 10- to 30-year sector and running from Sept. 9 through Nov. 4. The announcement came after the 30-year yield touched a 19-year high. Yields fell within minutes. By the next afternoon they had round-tripped to levels above where they started. The market’s verdict was swift and correct: This wasn’t liquidity management, it was price management—and a mistake far larger than $4 billion suggests. Read Full Article »
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FortuneIn the Journal, Druckenmiller criticized Treasury’s decision to double long-dated bond buybacks from $2 billion to at least $4 billion per operation—operations targeting securities with maturities of 10 to 30 years, announced after the 30-year Treasury yield had reached a 19-year high.
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“The market’s verdict was swift and correct,” Druckenmiller wrote. “This wasn’t liquidity management, it was price management.”
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New York Post BusinessLines in the article included: “This wasn’t liquidity management, it was price management;” “not a malfunction but the machine doing its job;” and “The bond market wasn’t being a vigilante, as some would argue. It was being a pushover.”
8 details only one outlet reported
Independent claims that didn't surface elsewhere in our corpus. Treat as supplementary — not corroborated across outlets.
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01 CNBC There's an old Wall Street adage: Stocks float on a sea of bonds. Options traders are betting the tide is going out.
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02 MarketWatch Need to Know Wall Street’s massive bet against long-term bonds is a recipe for a painful bearish unwind, says Citadel Securities
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03 Bloomberg Morgan Stanley’s Khanduja Cuts Long-Bond Bets on Bessent Buyback Move Morgan Stanley Investment Management’s Vishal Khanduja, a top-performing fixed-income investor, is scaling back bets against long-term US bonds, saying Treasury Secretary Scott Bessent is prepared to do “whatever it takes” to keep yields from rising.
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04 Fortune A Shakespearean saga is playing out between the White House, Treasury Department, the Federal Reserve and Wall Street—and Scott Bessent, to paraphrase Shakespeare, is being hoist on his own hedge-fund petard.
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05 Financial Times Bessent’s bond intervention puts US Treasury on collision course with Fed Increased purchases of debt threaten to undermine central bank chief Kevin Warsh’s bid to tame inflation
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06 New York Post Business Druckenmiller – the founder of Duquesne Capital who has been described as a mentor to Bessent early in his hedge fund trading career – defended his undisclosed use of AI to write the piece, arguing that it was a no-brainer.
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07 RealClearMarkets Thirty-odd years ago, the Treasury Secretary was one of the speculators who broke the Bank of England in a famous trade. Now he’s on the other side of the markets, struggling to contain rising bond yields. Read Full Article »
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08 Washington Times Business NEW YORK — U.S. stocks are drifting Monday ahead of a week packed with potentially market-moving events. The areas of the bond market that the U.S. Treasury Department is trying to calm down, meanwhile, eased a bit.
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