by Tom Westbrook
Singapore — Billionaire investor Stanley Druckenmiller said the US is eroding the treasury market’s credibility and missing a debt reform window with buybacks that have caught bonds by surprise.
The former Soros Fund Management colleague of treasury secretary Scott Bessent said markets were “correct” to view last week’s announcement of a doubling in long-end buyback lots to $4bn as “price management” and “a mistake”, in an opinion piece published by the Wall Street Journal on Monday.
The treasury announced the move on Wednesday after the US 30-year yield hit a nearly 20-year high, and it triggered a short-lived rally that soon reversed.
Druckenmiller said the long bond yield was the most important price in the world, and intervening risked being sucked into even larger buybacks to defend it, as well as damaging credibility by departing from a reputation for reliability.
