--- title: "Trump Administration 'Panicked' by Announcing Treasury Bailout, Says Peter Schiff: 'Sounding' the Alarm Made the Problem Worse" type: "News" locale: "en" url: "https://longbridge.com/en/news/296567762.md" description: "Economists Peter Schiff and Mohamed El-Erian argue that the Trump Administration's announcement of increased Treasury bond buybacks may have exacerbated market instability. Schiff claimed the move panicked investors, while El-Erian noted the rapid reversal in 30-year yields. Macro investor Raoul Pal termed it 'The Bessent Put,' highlighting fiscal intervention, whereas Justin Wolfers observed that despite short-term drama, long-term borrowing costs remain high due to deficits and geopolitical risks." datetime: "2026-08-21T03:38:52.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296567762.md) - [en](https://longbridge.com/en/news/296567762.md) - [zh-HK](https://longbridge.com/zh-HK/news/296567762.md) generator: "portal-rs" --- # Trump Administration 'Panicked' by Announcing Treasury Bailout, Says Peter Schiff: 'Sounding' the Alarm Made the Problem Worse Economists **Peter Schiff** and **Mohamed El-Erian** say the Treasury Department’s move to double its bond buybacks may already be unraveling, as the 30-year yield reverses higher just a day after falling on the announcement. ## **The Intervention Made Things Worse** “Now that the Trump Administration has panicked by announcing a Treasury bailout, investors who hadn’t yet realized there was a problem will get the message and start selling,” Schiff said on X. He added that if Treasury Secretary **Scott Bessent** believed the bond market already had a problem, “sounding the alarm made the problem much worse.” > Now that the Trump Administration has panicked by announcing a Treasury bailout, investors who hadn't yet realized there was a problem will get the message and start selling. If Bessent thought we had a bond market problem before, sounding the alarm made the problem much worse. > > — Peter Schiff (@PeterSchiff) August 20, 2026 The Treasury Department announced Wednesday it would at least double its liquidity-support buybacks for long-dated bonds, from $2 billion to $4 billion per operation, sending the 30-year yield down to around 5.19% before it climbed back to as high as 5.27% by Thursday. El-Erian said the reversal in 30-year yields wasn’t surprising in itself, given how short-term the effects of announcements like the Treasury’s tend to be. What caught his attention, he added, was “the speed and magnitude of the retracement.” > Looking at this two-day Bloomberg chart, the retracement in 30-year government bond yields (i.e., higher) isn't surprising, given what history tells us about the inherent short-term effects of announcements like the one we heard from the Treasury yesterday. > What is surprising is… pic.twitter.com/YSxZ5rKwFt > > — Mohamed A. El-Erian (@elerianm) August 20, 2026 ## ‘The Bessent Put’ Macro investor **Raoul Pal** called the move “The Bessent Put,” saying “the extra dollars are small, the signal is enormous,” as the fiscal authority, rather than the Federal Reserve, stepped in to defend the long end within 24 hours of the yield highs. He said the next leg of the strategy would likely fall to Fed Chair Kevin Warsh, who he expects to “deliver his part of the grand bargain between the Fed and the Treasury.” > The Bessent Put > > Today the US Treasury doubled the size of its long-end bond buybacks, the day after the 30-year yield hit a 19-year high at 5.33%. The extra dollars are small. The signal is enormous. > > For the first time, the fiscal authority, not the Fed, stepped in to defend… > > — Raoul Pal (@RaoulGMI) August 20, 2026 Pal added that the broader goal is funding both government debt and hyperscaler capital spending simultaneously, calling it “the most important game of all time.” **Read Also: Teen Drops Landmark Social Media Addiction Lawsuit Against Meta, Google and Snap Ahead of October Trial: Wants to 'Resume' Her Life** ## 24 Hours of Drama Economist **Justin Wolfers** said Bessent’s intervention “succeeded in pushing interest rates down,” but added, “no one really knows what he’s doing, or why.” “The end result: 24 hours of drama, and bond yields are basically unchanged,” Wolfers wrote in his blog, adding that the real story is the longer-term climb in borrowing costs, due to AI-related borrowing, rising geopolitical risk, and government deficits now at their highest level since World War II outside of the pandemic and 2008 financial crisis. **Read Also: Mike Selig Says CFTC Will 'Move Swiftly' to Propose Rules if Democrats Continue to Stall CLARITY Act: 'We’ve Crossed the Rubicon** ***Disclaimer*:** *This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.* *Image via Jason Raff/Shutterstock* ### Related Stocks - [SHV.US](https://longbridge.com/en/quote/SHV.US.md) - [BIL.US](https://longbridge.com/en/quote/BIL.US.md) - [GOVT.US](https://longbridge.com/en/quote/GOVT.US.md) - [TLT.US](https://longbridge.com/en/quote/TLT.US.md) - [IEF.US](https://longbridge.com/en/quote/IEF.US.md) - [UBT.US](https://longbridge.com/en/quote/UBT.US.md) - [TMF.US](https://longbridge.com/en/quote/TMF.US.md) - [TBT.US](https://longbridge.com/en/quote/TBT.US.md) - [TMV.US](https://longbridge.com/en/quote/TMV.US.md) - [TBF.US](https://longbridge.com/en/quote/TBF.US.md) - [TLTW.US](https://longbridge.com/en/quote/TLTW.US.md) - [TSYW.US](https://longbridge.com/en/quote/TSYW.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [SNAP.US](https://longbridge.com/en/quote/SNAP.US.md) - [SSTK.US](https://longbridge.com/en/quote/SSTK.US.md) ## Related News & Research - [TREASURIES-US yields drop as tame July inflation data cools rate hike bets](https://longbridge.com/en/news/295671322.md) - [U.S. Consumer Prices Inch Up In Line With Estimates In July, Annual Growth Edges Lower](https://longbridge.com/en/news/295676544.md) - [TREASURIES-US Treasury yields tick higher; inflation outlook helps cool hike bets](https://longbridge.com/en/news/293199261.md) - [Selling grips bond markets from US to Japan as inflation, fiscal worries take hold](https://longbridge.com/en/news/296191732.md) - [JGB yields jump to track U.S. yields higher](https://longbridge.com/en/news/294305565.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**