Scott Bessent went from ‘I am the house’ to ‘I can’t set the equilibrium price’ in 13 days. What it means for you

Thirteen days later, seated on the set of CNBC’s Squawk Box, he told anchor Joe Kernen something rather different: “I can’t set the equilibrium price.”

What happened in between is a story about the limits of government power in financial markets — with real consequences for everyday Americans.

The intervention and its aftermath

After 30-year Treasury yields surged toward levels not seen since before the 2008 financial crisis, Bessent announced an escalating series of bond buybacks — purchases of long-dated government debt designed to reduce supply and push yields down. The program grew from $2 billion to $4 billion to a tripled $6 billion per operation, according to Bloomberg.

The bond market was unimpressed. Yields barely moved. Ed Yardeni, president of Yardeni Research, described the $6 billion as “little more than a rounding error” in the $32 trillion Treasury market, according to CNN.

And as Axios reported, traders interpreted the buybacks as an attempt to artificially suppress long-term yields, and concluded the scale was too small to matter.

Bessent’s mentor, legendary investor Stanley Druckenmiller, publicly criticized the intervention, MarketWatch notes. When Kernen asked on Squawk Box whether either man had conceded the other was right, Bessent replied: “Since I’ve met him [in] 1988, I don’t think either one of us has ever said that to each other.”

On CNBC, Bessent contextualized his buyback decision carefully: “I just raised the size because we are in a very illiquid period. The market was moving quickly … markets are never in equilibrium. They’re either moving away from equilibrium or toward equilibrium. I thought that they were moving away.”

He also pointed to oil prices as a major driver — noting a high correlation between 30-year yields and crude oil prices since the outbreak of the Iran war, which sent energy prices surging and rattled the inflation outlook across global bond markets, according to S&P Global.

“Once we get on the other side of this conflict, which we will, I think the oil markets are going to be more supplied than they previously were and rates should come down,” he told CNBC.