Bessent Addresses His Mentor’s Criticism Of U.S. Debt Buybacks, Defends Intervening In The Market

Treasury Secretary Scott Bessent defended the administration's decision to buy U.S. debt, addressing criticism from his mentor Stanley Druckenmiller.

"Stan's a great investor, but what I would point out is that again, the U.S. bond market has been the best performing market since the president came in," Bessent told CNBC on Monday.

Asked about the fact that bond yields have been rising globally, Bessent claimed that is not the case in the U.S.: "They're flat since the president came in," he said, even though the outlet noted that they have edged higher.

Stanley Druckenmiller, founder of Duquesne Family Office and Bessent's former investing mentor, claimed in a Wall Street Journal op-ed that trying to suppress yields through government bond purchases will not solve the United States' deteriorating fiscal position that is driving borrowing costs higher.

The piece was published after the Treasury moved to expand its purchases of longer-dated government debt. Bessent initially announced plans to double the department's usual $2 billion buybacks of older, or "off-the-run," Treasury securities. Officials have also indicated that the program could become substantially larger.

Treasury sources told CNBC that the government could potentially tap its roughly $935 billion Treasury General Account to finance additional purchases. The account functions as the federal government's primary operating cash balance.

The interventions have had some effect. Longer-term Treasury yields have retreated from recent peaks that reached levels not seen since before the 2008 global financial crisis. But critics argue the relief could prove temporary, particularly as Washington continues issuing enormous amounts of debt.

About $4.8 trillion in U.S. government debt was issued in 2025, and this year could surpass that amount. Meanwhile, total federal debt recently crossed $40 trillion, and the 2026 budget deficit is on track to exceed $2 trillion.

Druckenmiller said those fundamentals, rather than a malfunctioning bond market, explain why investors are demanding higher yields. "If the 30-year must trade at 5.5% to clear, that isn't a crisis. It is an invoice," Druckenmiller wrote.

"Then do the only thing that durably lowers long-term yields: address the primary deficit." Druckenmiller's criticism carries additional weight because of his history with Bessent. Both men worked with George Soros and participated in the famous early-1990s trade against the British pound.

Now Druckenmiller is warning his former colleague that Treasury risks damaging its credibility if investors conclude the government is attempting to establish an unofficial ceiling on yields. "Every basis point of artificial yield suppression is a subsidy to procrastination," Druckenmiller wrote. Once investors believe Treasury is defending a particular bond price, he argued, each increase in yields becomes a test of how much money officials are prepared to spend.

"Governments defending prices against fundamentals always lose," he added.