US debt tops $40 trillion; deficit projected at $2 trillion
Druckenmiller’s column followed Bessent’s decision to at least double the maximum size of the Treasury’s bond buyback operations, from $2 billion to $4 billion. That move briefly pushed US long-term bond yields lower before the effect reversed. “The market’s verdict was swift and correct: This wasn’t liquidity management, it was price management — and a mistake far larger than $4 billion suggests,” Druckenmiller wrote in the Journal.
Druckenmiller described the long-term Treasury yield as “the only fiscal disciplinarian the US has left.” “The long-term Treasury yield is the most important price in the world,” he wrote. “Neither party will run on entitlement reform. Both have spent the past decade expanding commitments while ignoring arithmetic.”
The Guardian, citing CNBC, reported on August 24 that Bessent could expand his bond-buying capacity by conducting purchases using the Treasury’s General Account, a government fund held at the Federal Reserve that holds nearly $1 trillion. The intervention comes as the US national debt has surpassed $40 trillion and the annual deficit is projected to reach $2 trillion this year.
Druckenmiller argued that addressing the primary deficit, rather than intervening in the bond market, is the only path that would durably lower long-term yields. “Governments defending prices against fundamentals always lose. The only variable is how much they spend before conceding,” he wrote. “The reward is enormous: A credible fiscal package would do more for the long end of the curve than a buyback program 1,000 times this size.”
Bessent’s intervention is a signal that “Washington is increasingly uncomfortable with soaring long-term borrowing costs,” said Axel Rudolph, the chief technical analyst at the investing and trading platform IG.
The 10-year Treasury yield stood at 4.74 percent on August 25, 2026, according to Federal Reserve Economic Data.