Former mentor predicts failure for Treasury secretary's bond yield suppression

Stanley Druckenmiller, who mentored Scott Bessent, has publicly warned that the Treasury secretary's efforts to lower US borrowing costs through expanded bond buybacks will fail. In a Wall Street Journal op-ed, Druckenmiller argued that the government should let the bond market dictate yields and focus on reducing the budget deficit. Bessent recently doubled the maximum size of Treasury buyback operations, but the market quickly reversed the initial drop in yields.

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Druckenmiller's warning carries particular weight given his history with Bessent, whom he mentored at Soros Fund Management in the 1990s. The two worked together during the famous Black Wednesday episode in 1992, when Soros's firm profited by betting against the British pound, forcing its exit from the European exchange rate mechanism. That experience underpins Druckenmiller's argument that governments cannot successfully defend prices against market forces.

Bessent's recent action doubled the maximum Treasury buyback size from $2bn to $4bn, and CNBC