Druckenmiller warns that the bond market has been pre-pricing

Stanley Druckenmiller recently published an opinion article in the Wall Street Journal warning that the bond market had been priced early. On 19 August, the Ministry of Finance announced a doubling of its long-term bond buy-back operation to at least $4 billion, scheduled to take place from 9 September to 4 November. This was done after the highest rate of return in almost 19 years, and the market reacted to it in a modest way. Druckenmiller noted that the current bond market was not facing a crisis, but rather an “invoice”, and stressed that if this signal was suppressed, fiscal reform would be delayed. In his view, intervention in bond markets could lead to greater risk and investors should focus on future fiscal policy changes。