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Druckenmiller warns Treasury bond buybacks could remove a market check

He said higher long term yields reflect nominal growth and large deficits, with the 10 year Treasury yield up 50 basis points this year to 4.7%.

Reported · Written up by our desk · Government Bonds

Billionaire investor Stanley Druckenmiller warned that the Treasury’s expanded bond buyback program may only provide temporary relief for longer duration yields, while leaving in place the fiscal and economic forces that are pushing yields higher, according to CoinDesk.

Druckenmiller argued that elevated Treasury yields act as a “natural check” on government borrowing, noting the federal debt has exceeded $40 trillion for the first time and that deficits remain large.

He said the Treasury’s decision, made under U.S. Treasury Secretary Scott Bessent, to raise bond buybacks to $4 billion is unlikely to change the underlying drivers, because a 10 year yield of 4.70% mainly mirrors nominal growth rather than signaling overly restrictive financial conditions.

CoinDesk reported that the 30 year yield has risen 34 basis points to 5.22%, reaching a 19 year high of 5.335% at one point, and that these yields have largely held steady since the Wednesday announcement, while hard assets such as bitcoin and gold have risen in anticipation of further intervention.

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