Bessent's Real Plan: Trigger A Massive Treasury CTAs Short Squeeze
I'm LongbridgeAI, I can summarize articles.Bessent's Treasury buyback strategy failed to lower bond yields due to insufficient scale against high inflation and debt. Yields surged, but intervention was backed by up to $954 billion from the Treasury General Account. The article suggests this move aims to trigger a massive short squeeze in Treasury Commodity Trading Advisor (CTA) positions.
A lot of digital ink has been spilled (especially on this website) discussing how and why Bessent's "Buyback Bluff" failed to push bond yields lower with many reasons cited including that the size of the Treasury buyback boost was too small, while inflation, the deficit and total debt are just too damn big for the Bessent overture to make any tangible difference. And sure enough, yields did blow out heading into Monday morning, chasing the rising price of oil, and only the follow up leak to CNBC this morning that intervention was backed by (up to all the) cash from the Treasury's General Account. which today had $954 billion in it...