Stan Druckenmiller told Scott Bessent exactly what it would take to stop Washington from spending: “the clowns in Washington – unless they get a signal from the bond market, they’re just going to keep spending”
this is him explaining the arithmetic nobody runs on corporate America, why he went from 93% invested to flat over a single Trump tweet, and what he says the Fed has actually built over the last ten years
“when the Trump tweet went out I went from 93% invested to net flat. not because I’m trying to make money – I just don’t want to play in this environment”
“corporate debt went from $6 trillion to $10 trillion. profits went from $1.7 to $2.2 trillion. and the interest cost on that extra $4 trillion only went up 23%. you’d think profits would explode with that formula. they went up 29% – over eight years”
“we have all these zombies walking around. the most innovative period since the late 1800s, and you’re hardly seeing bankruptcies – because there have been no market signals from the Fed”
“if I were trying to create a deflationary bust, I would do exactly what the world central banks have been doing”
bookmark & watch the full conversation – then read the article below ↓
Stan Druckenmiller told Scott Bessent exactly what it would take to stop Washington from spending: "the clowns in Washington – unless they get a signal from the bond market, they're just going to keep spending"
this is him explaining the arithmetic nobody runs on corporate… https://t.co/M3qXV4ophS pic.twitter.com/qvll2IV8Ky
— Сarm1ne (@carm1nee) August 18, 2026
June 3, 2019, at the Economic Club of New York (507th meeting). Scott Bessent moderated the conversation with Stan Druckenmiller.
This is excellent:
Rick Santelli on the soaring issuance of Treasury debt and the challenges/repercussions of it:
Good stuff: pic.twitter.com/owytlZRNoW
— QE Infinity (@StealthQE4) August 18, 2026
Hiking rates is the only way the Fed is going to get the long end of the curve down.
I still think the next move by the Fed is a hike not a cut.
If for nothing else to send a signal that the Fed is serious about fighting inflation. https://t.co/VyqzpcyI1t
— QE Infinity (@StealthQE4) August 19, 2026
The $2 Trillion Shield is Gone. The Bond Market is a Loose Cannon.
For two years, the Fed’s Reverse Repo (RRP) facility acted as Wall Street’s hidden shock absorber. It peaked at $2.5 trillion, allowing money market funds to swallow up massive government debt and artificially suppress interest rates.
Now?
That ammunition is practically zero. The safety net has left the building.
The Only Good News:
🏦The Treasury General Account (TGA) the government’s checking account …is approaching $1 trillion. This cash pile helps the government pay its immediate bills, buying the plumbing a little time.
The Bad News:
⚠️The TGA is just a temporary band-aid. The underlying reality is that the bond market is now a completely free agent.
Without the RRP absorbing the pressure:
-New debt must be funded by draining actual commercial bank reserves.
-The raw laws of supply and demand are back, pushing primary market yields higher. (Hence the more severe erosion of late)
-The financial plumbing is completely exposed to instability, dysfunctions, and sudden rate spikes.
The era of artificial liquidity suppression is officially over.
Welcome to the free market bond reality.
The pain trade has entered the building.
For one’s private perusal.
Enjoy.
🚨 The $2 Trillion Shield is Gone. The Bond Market is a Loose Cannon.
For two years, the Fed’s Reverse Repo (RRP) facility acted as Wall Street’s hidden shock absorber. It peaked at $2.5 trillion, allowing money market funds to swallow up massive government debt and artificially… pic.twitter.com/Pbgk7AKHb5
— The Great Martis (@great_martis) August 18, 2026
Long-term Treasury yields rose to their highest point since 2007, creating another headwind for the economy and lifting borrowing costs for consumers and businesses.
A global bond-market rout is pressuring stocks on Tuesday, sending major U.S. indexes lower for a third consecutive session.
Equity investors might not be ready for what comes next, according to one Wall Street strategist.
The yield on the 30-year Treasury bond touched its highest level since June 2007 on Tuesday, before easing back slightly. Based on the technical trajectory, the selloff could worsen in short order, said Jonathan Krinsky, a top technical strategist at BTIG, in a report shared with MarketWatch.