Druckenmiller: The Ministry of Finance suppresses the warning signs of the debt market

Stanley Druckenmiller, a well-known investor, said that the Treasury was suppressing warning signals from the bond market. His views added an important voice to the debate on whether the Treasury's extended bond buy-back scheme would provide a legal liquidity tool or directly manage long-term debt prices. He warned that the suppression of the rate of return would remove political pressure, suggesting that it was a structural rather than a tactical shift that could continue to exert upward pressure on the expectation of a term premium in the future. Drukken Miller also mentioned that on 19 August, the Ministry of Finance announced an increase in the scale of the buy-back of bonds for the 10- to 30-year period from $2 billion to at least $4 billion per buy-back, scheduled to continue from 9 September to 4 November. Despite the short time that this news had led to a decline in the rate of return, it was followed by a full rebound in one day, which was described by Drukken Miller as a quick and accurate judgement by the market。