Treasury Secretary Scott Bessent is aggressively buying back U.S. debt to crush soaring bond yields, aiming to ease borrowing costs amid record-breaking national debt—now over $40 trillion—with the deficit projected to hit $2 trillion this year. His department also intervened in currency markets to bolster the yen, preventing Japan from offloading Treasuries and staving off rate spikes. While yields have dipped from recent highs, critics—including former mentor Stanley Druckenmiller—warn these moves are a dangerous band-aid that ignores the fiscal crisis. Druckenmiller argues artificial yield suppression erodes Treasury credibility and delays inevitable market corrections, costing more in the long run. The Treasury may tap its general account for funding, but unlike the Fed, it can’t print money. Meanwhile, the Fed remains on the sidelines, preferring market-driven pricing over intervention.
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