Druckenmiller Bites Back at Bessent Buyback Plan

Billionaire investor Stanley Druckenmiller, who mentored Scott Bessent, denounces the Treasury’s plan to double long-dated bond buybacks to at least $4 billion per operation, calling it price management that distorts markets rather than a liquidity measure. He argues that with the national debt exceeding $40 trillion and deficits around 6% of GDP, higher borrowing costs serve as a needed fiscal discipline, and artificial yield suppression postpones necessary entitlement reforms. The Treasury defends the move as routine liquidity operations, while acknowledging a broader toolkit that could include future purchases, including potential use of the General Account. After an initial drop in long-dated yields following the announcement, markets quickly reversed, underscoring Druckenmiller’s point that markets should determine prices rather than be propped up by policy. The dispute highlights a rare public clash between mentor and mentee over macro strategy as debt levels and deficits loom larger for U.S. borrowing costs and fiscal policy.