Trump Administration 'Panicked' by Announcing Treasury Bailout, Says Peter Schiff: 'Sounding' the Alarm Made the Problem Worse

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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.

"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.

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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

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.

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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

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

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."