US Treasury’s Scott Bessent ‘will lose’ battle with bond markets, former mentor warns
The US Treasury's plan to lower interest rates through bond buybacks is facing skepticism from market experts. Treasury Secretary Scott Bessent aims to tap the near $1 trillion Treasury General Account to fund bond buybacks. However, his former mentor, billionaire Stanley Druckenmiller, warns that Bessent will lose the battle with bond markets. The plan is seen as an attempt to suppress bond yields and put the 'fear of God' into bond vigilantes.
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- ✓ The US Treasury has near $1 trillion in the Treasury General Account to potentially fund bond buybacks.
- ✓ Stanley Druckenmiller, Bessent's former mentor, believes Bessent will lose the battle with bond markets.
- ✓ The federal deficit is near 6% of GDP and the national debt is over $40 trillion.
What changed
Stanley Druckenmiller, Bessent's former mentor, publicly expressed his skepticism about the plan, warning that Bessent will lose the battle with bond markets.
Live updates
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US Treasury's bond buyback plan faces skepticism
The US Treasury's plan to lower interest rates through bond buybacks is facing skepticism from market experts. Treasury Secretary Scott Bessent aims to tap the near $1 trillion Treasury General Account to fund bond buybacks. However, his former mentor, billionaire Stanley Druckenmiller, warns that Bessent will lose the battle with bond markets. The plan is seen as an attempt to suppress bond yields and put the 'fear of God' into bond vigilantes.
Why it matters
The US Treasury's plan to lower interest rates through bond buybacks comes amid a precarious fiscal position, with the federal deficit near 6% of GDP and the national debt over $40 trillion. The plan's success is uncertain, and experts are questioning its effectiveness. The bond market's reaction to the plan will be crucial in determining its outcome.
What is confirmed
- The US Treasury has near $1 trillion in the Treasury General Account to potentially fund bond buybacks.
- Stanley Druckenmiller, Bessent's former mentor, believes Bessent will lose the battle with bond markets.
- The federal deficit is near 6% of GDP and the national debt is over $40 trillion.
Still unconfirmed
- Bessent aims to put the 'fear of God' into bond vigilantes through his plan.
What to watch next
- The US Treasury's bond buyback plan implementation and its impact on bond yields
- The reaction of bond markets to the plan
- The release of US consumer confidence and inflation data
confidence 85%Sources used for this update (10)
- CNBC — Bessent could tap near $1 trillion Treasury General Account to fund bond buybacks, sources said
- The New York Times — What’s Behind the U.S. Treasury’s Latest Attempt to Lower Interest Rates
- Bloomberg — Druckenmiller, Bessent’s Early Mentor, Calls Bond Buys a Mistake
- The Guardian — US Treasury’s Scott Bessent ‘will lose’ battle with bond markets, former mentor warns
- WSJ — Global Bond Markets Stabilize as Investors Mull U.S. Buybacks, Iran Sanctions
- finance.yahoo.com — Scott Bessent Wants to ‘Put the Fear of God’ Into Bond Vigilantes — Why This Midterm Ploy Could Backfire on Investors
- www.theguardian.com — US Treasury’s Scott Bessent ‘will lose’ battle with bond markets, former mentor warns
- www.theguardian.com — US consumer confidence falls in August as gas prices remain above $4 per gallon
- nypost.com — How Scott Bessent is getting ready to slam Wall Street’s ‘bond vigilantes’: ‘Fear of God’
- www.theguardian.com — Is the Trump Treasury panicking over the level of US debt?
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