Bessent defended accelerated US government debt buybacks
US Treasury Secretary Scott Bessent defended the Donald Trump administration’s decision to accelerate buybacks of US government debt in response to criticism from investor Stanley Druckenmiller. Bessent made the statement on the sidelines of a meeting of G20 finance ministers in Asheville, North Carolina, CNBC reports.
Criticism of bond buybacks
In a column for The Wall Street Journal dated August 24, Druckenmiller called it a mistake for the US Treasury to more than double the volume of buybacks of government debt securities. In his view, liquidity tools do not resolve the issue of solvency, but only postpone it and increase the future cost of the problem. The investor later said that he prepared the column with the help of artificial intelligence tools.
The announcement of increased buybacks came amid bond yields rising to their highest levels in recent years. After the administration’s statement, yields fell sharply, but rose again the following day.
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Bessent’s position
Bessent said that the US bond market had shown its best performance since the beginning of Trump’s presidential term. He also disagreed with references to rising bond yields around the world, saying that in the United States, according to him, they had remained unchanged since the president took office. At the same time, CNBC notes that Treasury yields have risen somewhat since Trump’s inauguration amid pressure from tariffs and persistent inflation.
The Treasury chief said that he spoke with Druckenmiller after the column was published and that the conversation went well. Bessent also said that his task was to ensure that the market was guided by fundamentals rather than dictated policy. Earlier in August, he allowed that accelerated government debt buybacks could exceed the announced $4 billion.
