Stanley Druckenmiller, the billionaire investor who ran George Soros’s Quantum Fund, sees it differently. He hired Scott Bessent at Soros Fund Management in 1991 and mentored him for years afterward. On Monday, he used a Wall Street Journal column to tell his former student — now U.S. Treasury Secretary — that he’s making a mistake.
He worries the program won’t stay small. If traders think the Treasury is defending a price, every rise in yields becomes a challenge, forcing the government to keep buying. “Every basis point of artificial yield suppression is a subsidy to procrastination,” Druckenmiller wrote.
Then there’s what he calls the quieter cost. The Treasury is shifting some risk away from investors and makes borrowing easier, even though inflation is still above the Federal Reserve’s target — and this is happening weeks before a midterm election.
The rally that lasted about a day
Markets liked the news for an afternoon. Treasury yields — what the government pays to borrow — dropped when the Treasury announced it. But by the next day they had climbed back past where they started.
Bessent then went on CNBC and said the U.S. Treasury could increase the buyback past the earlier announced $4 billion. Days after that, CNBC reported that senior Treasury officials consider the government’s general account at the Federal Reserve — close to $1 trillion — available to help pay for the buying.
That’s roughly what Druckenmiller predicted.
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About that column
After an AI detection tool flagged the column, Druckenmiller told NOTUS on Tuesday that he had written it using artificial intelligence. “I write everything using AI now,” he said, comparing it to reaching for a calculator when solving math. He denies the whole piece was machine-written and says the argument is his.
What Bessent says
The Treasury rejects Druckenmiller’s interpretation. Bessent says the program is meant to support market liquidity, not control interest rates. At a Monday press conference he pointed out that nothing has actually happened yet. “We haven’t bought a single bond yet,” he said. Regular auctions, meanwhile, continue as scheduled.
Some on Wall Street doubt the plan can push long-term yields down for long. Evercore ISI analyst Krishna Guha called it “a weak form of Operation Twist,” and warned it could backfire if markets read it as a sign Washington is struggling to borrow cheaply.
