Agree with you and also @wolfofwolfst: "It’s a hocus-pocus show because the Treasury cannot print money, but has to issue debt to buy back debt, and because the amounts are too small to matter. Its sole purpose is to verbally manipulate the bond market to push up bond prices and push down long-term yields, and the bond market loves to be manipulated to where prices rise because existing bondholders, especially leveraged funds, can make a lot of money, and they just need a buy signal, and Bessent just gave them another buy signal."

CITADEL WARNS FED MESSAGING IS HURTING CREDIBILITY Citadel Securities said Fed Chair Kevin Warsh's policy framework is creating uncertainty by pledging to curb inflation without clearly explaining how. The firm warned that relying on higher market yields to tighten financial conditions risks a negative feedback loop, where delayed rate hikes fuel higher inflation expectations and push long-term Treasury yields even higher. Citadel said the recent selloff in Treasuries reflects growing doubts about the Fed's policy credibility.

Was on @nbc earlier about the Treasury interventions we are seeing. The market has liquidity problems, which the Treasury can help with on the long end. However, the fundamental problems that we face have not changed: 1) Federal debt issuance held by the public eclipsed WWII levels earlier this year. Deficits and debt continue to rise. 2) Inflation is still a worry and the conflict is still with us. Diesel prices get into just about everything. That is a problem. 3) AI-related debt is competing with Treasury debt. 4)If we issue shorter term debt to lower long term yields, it will need to be financed sooner, and likely at higher rates. 5) Sovereign debt issuance has soared, which is already exceeding demand a jet rise in rates needed to get investors to lend. 6) Gulf states with large wealth funds need to turn even more inward due to Middle East conflict. That means less demand for debt and more defense outlays, another issue global in scope and inflationary. Dovetails with the AI boom. Bottom Line: we get some relief in long duration rates, including mortgages but the trend is still in the wrong direction on rates. Even with interventions, rates still above the level prior to rate cuts by the Fed. Rate hikes are going to make the short end duration rise, which is even more interest expense. Bond vigilantes getting restless in this debt environment.

Agree with you and also @wolfofwolfst: "It’s a hocus-pocus show because the Treasury cannot print money, but has to issue debt to buy back debt, and because the amounts are too small to matter. Its sole purpose is to verbally manipulate the bond market to push up bond prices and push down long-term yields, and the bond market loves to be manipulated to where prices rise because existing bondholders, especially leveraged funds, can make a lot of money, and they just need a buy signal, and Bessent just gave them another buy signal."

That sneaky bugger... Yield curve control & duration management are financial repression tools that Bessent has employed (like Yellen before him) against a backdrop of fiscal dominance & political expediency. That doesn't mean the long-end rising on war, inflation & supply issuance concerns is fixed! And that doesn't mean a Protracted/Escalating regional Middle East War risk is falling! But it is curious that Bessent chose THIS day to intervene as the selling under the surface kicked in Mon & bullish AI news couldn't bolster buying & bear steepener picked up speed (as warned). Algos triggered a bond, gold, equity pump off an announced $4B Treasury refunding announcement of buying Sept 9 - Nov 4th, but let's face facts: size matters & Bessent is gonna need a bigger boat. "Liquidity support" in the form of buyback operations in the long-end is not nearly enough to satisfy growing issuance. But... it **could** affect a big, important reaction: A flattening of the yield curve can drive real rates lower which is stimulative - along with lower USD - if it sticks. Add to that, **IF** inflation expectations FALL with mortgage spreads, then a normative Fed rate CUT could be back on the table. 🤯 But I still think this will be super hard to do given lack of consensus on FOMC board unless labor cracks hard. Also, as the future inflation from falling dollar will add to the difficulty. But the backstop by Bessent does put my $SPX $8200 2026 (MarketWatch call Dec 30th 2025) in full view again on falling dollar. So we've got that going for us.

ONLY reason why Bessent is intervening: Buyers strike on longer-duration bonds. From: 1. Corporate IG issuance at higher yields attracting fixed income away from UST auctions. 2. Inflation risks on falling dollar, war, fiscal dominance, etc 3. Bond raiders & Yen shorts re-engaging. As Geoffrey sums up, Bessent's "move is a nicotine patch for lung cancer." @GraphCall Chart h/t @Adam__Josephson "Buybacks represent a tiny fraction of the Treasury market even after being temporarily upsized, and need to be funded with yet more short-term debt."

That sneaky bugger... Yield curve control & duration management are financial repression tools that Bessent has employed (like Yellen before him) against a backdrop of fiscal dominance & political expediency. That doesn't mean the long-end rising on war, inflation & supply issuance concerns is fixed! And that doesn't mean a Protracted/Escalating regional Middle East War risk is falling! But it is curious that Bessent chose THIS day to intervene as the selling under the surface kicked in Mon & bullish AI news couldn't bolster buying & bear steepener picked up speed (as warned). Algos triggered a bond, gold, equity pump off an announced $4B Treasury refunding announcement of buying Sept 9 - Nov 4th, but let's face facts: size matters & Bessent is gonna need a bigger boat. "Liquidity support" in the form of buyback operations in the long-end is not nearly enough to satisfy growing issuance. But... it **could** affect a big, important reaction: A flattening of the yield curve can drive real rates lower which is stimulative - along with lower USD - if it sticks. Add to that, **IF** inflation expectations FALL with mortgage spreads, then a normative Fed rate CUT could be back on the table. 🤯 But I still think this will be super hard to do given lack of consensus on FOMC board unless labor cracks hard. Also, as the future inflation from falling dollar will add to the difficulty. But the backstop by Bessent does put my $SPX $8200 2026 (MarketWatch call Dec 30th 2025) in full view again on falling dollar. So we've got that going for us.

YUP, BESSENT! The U.S. Treasury is doubling long-end bond buybacks as it moves to shore up liquidity in one of the most pressured parts of the market. Starting Sept. 9 buybacks for 10–20Y and 20–30Y Treasuries will rise from $2B to at least $4B per operation.

YUP, BESSENT! The U.S. Treasury is doubling long-end bond buybacks as it moves to shore up liquidity in one of the most pressured parts of the market. Starting Sept. 9 buybacks for 10–20Y and 20–30Y Treasuries will rise from $2B to at least $4B per operation.

Now that is how you manipulate & move markets! USD/JPY FALLS 0.55% 10 158.16 USD dumps, Equities & Gold pump Oil & Yields soften. Bessent intervention? Or higher yields attracting deployment of CASH?