Story perspectives

Trump Considers Military Intervention in Bond Market

8/23/2026

Summary

Trump Considers Military

U.S. President Donald Trump said he would consider using the military to intervene in the bond market.
Trump denied directing Treasury Secretary Scott Bessent and credited Bessent’s own initiative.
Bessent announced an accelerated debt buyback to lower yields after an earlier failed buyback.
U.S. debt topped $40 trillion for the first time and Treasury will double long-term bond purchases next month.

Summary

Prasad Blames Administration

Dollar Index fell to 98.80 on Aug. 21, its lowest in about 100 days.
Cornell economist Eswar Prasad said the administration’s market moves worsened sentiment and achieved little.
JPMorgan co-head Sullivan likened Treasury buybacks to paying a mortgage with a credit card.
JPMorgan analyst Crook warned the intervention ignores structural challenges, likely raising long-term risk premiums.
Jake Remley said a few hundred million dollars cannot offset a $2 trillion fiscal deficit.

History

Historical Context

In 2011, the House and President Barack Obama faced a debt-ceiling standoff that forced Treasury Secretary Timothy Geithner to suspend about $2 trillion of borrowing. Budget Control Act signed on August 2, 2011 raised the limit, but Standard & Poor’s downgraded U.S. credit to AA+. The episode set a precedent for Treasury moves, including Trump-era buyback program that seeks to lower yields on a $40 trillion debt.

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Trump Considers Military

U.S. President Donald Trump said he would consider using the military to intervene in the bond market.
Trump denied directing Treasury Secretary Scott Bessent and credited Bessent’s own initiative.
Bessent announced an accelerated debt buyback to lower yields after an earlier failed buyback.
U.S. debt topped $40 trillion for the first time and Treasury will double long-term bond purchases next month.

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