The U.S. Secretary of the Treasury, Scott Bessent, is also one of the best macro traders of all time.
While with George Soros at the Quantum Fund, Bessent was one of the players who shorted the British pound ahead of a devaluation, reaping the firm a $1 billion payday in a single session in 1992.
Today, as Treasury Secretary, he’s on the other side of the trade, trying to bring bond yields down and finance the nation’s $40 trillion pile of debt.
One way to do that? Engineer a “short squeeze.” The kind of squeeze that marked Bessent’s time in the private sector, crushing national currencies for fun and profit.
The data is clear: Since the post-pandemic bottom in 2023, traders have been excessively short long-dated Treasury bonds. Prices are down, and yields are up. Way up.
The short-side trend had become a popular trade for retail investors, too. Rather than short Treasurys directly, it’s easier than ever to simply go short on ETFs that own Treasurys:
Treasury bonds have become a popular short in recent years, but Bessent may engineer a squeeze. (Source: Commonsenseplay @X)
On August 19, 2026, Bessent said the Treasury was increasing its buyback facility from $2 billion to $4 billion. The market barely flinched.
Yesterday, Bessent emphasized two key features of his strategy. First, the buy-back won’t double in size until September 9. And second, the Treasury general purpose fund may also be put to work. That fund is over $900 billion.
Bessent is telegraphing his strategy. If he’s able to engineer a “short squeeze,” and force the historic $150 billion in capital to sell at a loss… U.S. Treasurys will be the next GameStop play.
We know Bessent’s goal. He wants to engineer a trade that will allow him to roll over 20 and 30-year Treasurys into 2-, 3- and 7-year notes at lower yields. Will traders get with the program? Here’s your Pro recommendation, if they do…
Today’s Grey Swan Pro recommendation is a play on a potential short-squeeze in Treasury bonds. Today’s buyers can lock in a relatively high yield in what’s considered the world’s risk-free asset, while also potentially seeing some sizeable upside gain in the price in the months ahead.
~ Addison
P.S. Thursday on Grey Swan Live!,we’re joined by John Hunt of Casey Research.
We’ll be delving into more detail about what’s happening in the bond market, the U.S. Treasury’s latest round of sanctions against Iran, and what we could expect in the coming weeks as the U.S. midterms close in and Democratic Socialists take over their party. This’ll be a great one.
