{"id":7421,"date":"2023-10-31T05:09:14","date_gmt":"2023-10-31T05:09:14","guid":{"rendered":"https:\/\/infundpros.com\/markets\/stanley-druckenmiller-slams-janet-yellen-for-biggest-blunder-in-treasury-history-failing-to-lock-in-rock-bottom-interest-rates\/"},"modified":"2023-10-31T05:09:15","modified_gmt":"2023-10-31T05:09:15","slug":"stanley-druckenmiller-slams-janet-yellen-for-biggest-blunder-in-treasury-history-failing-to-lock-in-rock-bottom-interest-rates","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=7421","title":{"rendered":"Stanley Druckenmiller slams Janet Yellen for \u2018biggest blunder in Treasury history\u2019: Failing to lock in rock-bottom interest rates"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0002672229\" role=\"document\">\n<p>Treasury Secretary Janet Yellen has some explaining to do, according to billionaire hedge-fund titan Stanley Druckenmiller.<\/p>\n<p>Yellen missed an important opportunity, Druckenmille says, by not issuing more long-dated Treasury bonds when interest rates were near zero during the aftermath of COVID-19. <\/p>\n<div class=\"paywall\">\n<p>\u201cJanet Yellen, I guess because political myopia or whatever, was issuing 2-years at 15 basis points\u2026when she could have issued 10-years at 70 basis points or 30-years at 180 basis points,\u201d the former hedge-fund manager said during a conversation with Paul Tudor Jones at the Robin Hood Investors Conference, a clip of which circulated Monday on X, the social-media platform formerly known as Twitter. <\/p>\n<p>\u201cI literally think if you go back to Alexander Hamilton, it is the biggest blunder in the history of the Treasury,\u201d Druckenmiller said. <\/p>\n<p>This omission seems even more egregious, according to Druckenmiller, considering that Americans refinanced their mortgages at rock-bottom rates en masse, while corporations with sturdy credit ratings refinanced their debt. <\/p>\n<p>\u201cI have no idea why she hasn\u2019t been called on this. She has no right to still be in that job.\u201d <\/p>\n<p>\u201cWhen rates were practically zero, every Tom, Dick and Harry in the U.S. refinanced their mortgage\u2026every corporation was extending their debt,\u201d he said. <\/p>\n<p>He then rattled off some alarming numbers to illustrate the consequences of not reining in spending. <\/p>\n<p>\u201cHere\u2019s the consequences, folks. When the debt rolls over by 2033, interest expense is going to be 4.5% of GDP if rates are where they are now. By 2043 \u2014 it sounds like a long time but it is really not, it is 20 years \u2014 interest expense as a percentage of GDP will be 7%. That is 144% of all current discretionary spending,\u201d he said. <\/p>\n<p>According to 10-year projections released earlier this year by the Congressional Budget Office, the federal government\u2019s nonpartisan budget agency, annual federal outlays are expected to swell to nearly $10 trillion by 2033 compared with nearly $6.3 trillion spent in 2022. <\/p>\n<p>It is projected that in 2033 the deficit \u2014 that is, the amount of federal expending that exceeds income \u2014 will be more than $2.8 trillion, twice the $1.38 trillion from 2022. <\/p>\n<p>\u201cInterest expense alone will be 144% of all discretionary spending, so the politicians who are telling you, and who think they are not going to cut entitlements, it is just an outright lie,\u201d Druckenmiller said. <\/p>\n<p>To be sure, Yellen wasn\u2019t the only Treasury secretary to preside over this latest round of near-zero interest rates. Steven Mnuchin served as Treasury secretary under President Donald Trump and didn\u2019t leave office until January 2021. <\/p>\n<p>The Fed cut its benchmark policy rate to near zero during March 2020 as the COVID-19 pandemic upended global markets and the economy. They remained at that level until March 2022, when the central bank embarked on what would become the fastest pace of rate hikes since the 1980s. Recently, the Fed\u2019s rate hikes and investors demanding a greater term premium have helped push yields on long-dated Treasurys to their highest levels in 16 years. <\/p>\n<p>Druckenmiller rose to fame on Wall Street for his work managing George Soros\u2019s Quantum Fund. Druckenmiller also earned a stellar record at his former hedge fund, Duquesne Capital Management, which he closed in 2010 before converting it into a family office. <\/p>\n<p>Representatives for the Treasury Department didn\u2019t return a request for comment from MarketWatch. But the department on Monday released its latest borrowing estimates for the fourth quarter, saying \u00a0it expects to borrow $776 billion, which is $76 billion lower than the prior estimate made in July.<\/p>\n<p><strong>See: <\/strong>Treasury cuts its fourth-quarter borrowing estimate<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/story\/stanley-druckenmiller-slams-janet-yellen-for-biggest-blunder-in-treasury-history-failing-to-lock-in-rock-bottom-interest-rates-e6439436?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Treasury Secretary Janet Yellen has some explaining to do, according to billionaire hedge-fund titan Stanley Druckenmiller. Yellen missed an important opportunity, Druckenmille&#8230;<\/p>\n","protected":false},"author":1,"featured_media":7422,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":{"0":"post-7421","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Stanley Druckenmiller slams Janet Yellen for \u2018biggest blunder in Treasury history\u2019: Failing to lock in rock-bottom interest rates | inFundPros<\/title>\n<meta name=\"description\" content=\"Treasury Secretary Janet Yellen has some explaining to do, according to billionaire hedge-fund titan Stanley Druckenmiller. 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