Treasury Secretary Scott Bessent was widely scrutinized Saturday after revealing an extraordinary plan designed to stabilize the bond market, a plan described by one expert as a “band-aid on a bullet hole.”
Last week, investor Lawrence McDonald flagged a series of "red flashing signals" on Fox Business, warning that climbing global bond yields were dragging prices lower, a pattern he likened to the run-up to 1987's Black Monday crash.
In an effort to calm the market, Bessent revealed that he planned to double Treasury’s buybacks of long-term bonds to calm a selloff that had pushed 30-year yields to an 18-year high amid Iran war fears and fiscal worries, just as U.S. debt topped $40 trillion.
As described by cross-asset strategist Charlie McElligott, Bessent’s plan was a “band-aid on a bullet hole” that would “not be enough to placate market forces,” and Steve Schmidt, former strategist for President George W. Bush, took his condemnation of Bessent even further.
“He is, bar none, the worst treasury secretary in the history of the United States,” Schmidt said, The Guardian reported Saturday.
“Because the first treasury secretary was a true genius, the distance between Alexander Hamilton and Bessent in evolutionary scale is the difference between a flea and a human being. He is inept, he is incompetent, he is dishonest, he is smug, he is craven.”
Bill Galston, an academic, political adviser and senior fellow at the Brookings Institution, argued that critics of Bessent’s plan were far more reaching than they appeared.
“The long bond buyback was perceived as somewhat farcical by the financial community, and when he went on to opine that we could grow our way out of the debt, I’m sure he knows better than that,” Galston said, per The Guardian.