Treasury Secretary Scott Bessent stated he has spoken with his former mentor, Stanley Druckenmiller, following the investor's sharp criticism of Bessent's recent intervention in the bond market. Bessent further claimed that U.S. Treasuries may outperform other global debt markets as a direct result of these actions.

In an interview on Monday, Bessent addressed the billionaire investor's pointed comments, saying: "Stan is a great investor. He changes his mind frequently, and he doesn't like losing money. I suspect he lost money the very day he published that commentary." The remarks came after the Treasury Department unexpectedly announced an expansion of its bond buyback program, a move Druckenmiller argued policymakers should not have made, stating that the bond market should be allowed to function on its own.

"Hedge fund managers like to accelerate things," Bessent said, noting that his job is to "slow things down." He explained that his objective is to ensure market participants understand that price movements are not one-directional and that they "focus on fundamentals rather than letting the market dictate policy."

Bessent said U.S. Treasuries are expected to outperform other major bond markets this month, pointing out that the 10-year Treasury yield has remained roughly flat since President Donald Trump took office. The 10-year yield briefly climbed above 4.75% earlier Monday, marking its highest level since January 2025, as rising oil prices strengthened expectations that the Federal Reserve could hike interest rates. So far in August, the 10-year Treasury yield has risen about 2 basis points, compared with a gain of more than 10 basis points for the German 10-year bund and a 15-basis-point rise for Japan's 10-year government bond.

Bessent also dismissed any notion of disagreement between himself and Federal Reserve Chair Kevin Warsh over U.S. bond market policy. "We certainly see eye to eye," he said. When pressed on what that means, Bessent responded: "We both believe the U.S. bond market is the most resilient in the world." Warsh, in a keynote speech on Friday, said the Fed "needs clear market signals and should receive them as unfiltered as possible." Some market participants believe Bessent's series of measures are, in effect, an attempt to push yields lower ahead of elections as a way to control borrowing costs. "I never said I was trying to change the direction of U.S. Treasury yields," Bessent said. When asked how he views the market's reaction to the buyback announcement, Bessent remarked: "I can give you a counterfactual: what if I hadn't done it?" He added: "That's why we are perhaps the best-performing bond market this month."

Turning to foreign exchange, Bessent was asked why the yen has weakened since the U.S. joined a coordinated intervention on July 31 to buy the Japanese currency. "I can't influence the natural equilibrium," he said. "What we can do is send a signal. I have information the market doesn't, and I believe the Japanese government and the Bank of Japan will take measures to push the yen higher." When asked about the possibility of a rate hike by the Bank of Japan, Bessent said: "I think the market is already pricing that in."

Bessent made these remarks on the sidelines of the G20 finance ministers and central bank governors meeting in Asheville, North Carolina. He also plans to meet with Canadian Finance Minister François-Philippe Champagne. Bessent again criticized Canadian Prime Minister Mark Carney, claiming the U.S. had offered Canada "the most favorable trade deal of any country in the world" before negotiations broke down. "Unfortunately, he didn't do what was in the best interest of the Canadian people," Bessent said of Carney.