Soros Disciple, HYPE Whale Bessent Blasts: Treasury Yields Are a Fiscal Alarm, the Treasury Should Not Suppress the Signal

On August 25, legendary investor Stanley Druckenmiller criticized the U.S. Treasury in a Wall Street Journal commentary for recently expanding its long-dated Treasury buyback program, saying the move would weaken the market's pricing of U.S. fiscal risk and could be interpreted as an attempt to cap long-end yields. The backdrop is that long-end yields have been rising, with the 30-year Treasury climbing to a 19-year high. The Treasury announced on August 19 that it would increase the size of its long-dated buyback operations for 10- to 30-year maturities from $2 billion to at least $4 billion per operation, running from September 9 to November 4.

Druckenmiller argued that the rise in yields itself is the bond market's warning about U.S. fiscal conditions: inflation remains above target, unemployment is near full employment levels, the federal deficit is around 6% of GDP, and government debt has surpassed $40 trillion, with net interest costs rising rapidly. He warned that if the Treasury keeps intervening at the long end, it would undermine the pressure for fiscal discipline in Washington. If it buys long-dated bonds while funding itself with short-term bills, the market could view this as a "mini QE." Such actions would continue to influence the trading direction of U.S. equities, gold, the dollar, and crypto assets.

Separately, Duquesne Family Office's latest 13F filing shows a new position in HYPE Treasury stock, Hyperliquid Strategies Inc. (PURR), of approximately 2.9415 million shares, valued at around $23.15 million.

[Rhythm]