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

Radhika Anilkumar Nadig

Mon, August 24, 2026 at 3:31 PM GMT+3 5 min read

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

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.

Don't Miss:

A single bad hire can set a startup back years. Here are the 5 hires founders most often misjudge — and why
Still Learning the Market? These 50 Must-Know Terms Can Help You Catch Up Fast

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."

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.

Image via Jason Raff/Shutterstock

Read Next: Think you're saving enough for your kids? You might be dangerously off — see why

Building Wealth Across More Than Just the Market

Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That's why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn't tied to the fortunes of just one company or industry.

Arrived

Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly.

Frontieras

As electricity demand accelerates alongside AI and domestic energy production becomes a growing priority, Frontieras is developing patented technology that converts coal into fuels, chemicals, and low-emission energy products without combustion. Through its Regulation A offering, investors can gain exposure to an emerging energy infrastructure company focused on modernizing American industrial and power resources.

FarmTogether

Farmland has historically held its value through market volatility and delivered returns uncorrelated to stocks and bonds. For accredited investors, FarmTogether offers direct access to high-quality U.S. farmland starting at $15,000 — fully managed, with no landlord headaches.

Fundrise

Private real estate and private credit can add income and stability to a stock-heavy portfolio. Fundrise offers access to diversified private real estate and credit strategies through an easy-to-use platform, with professionally managed portfolios designed to generate passive income and long-term growth.

Qnetic

As electricity demand rises alongside AI, data centers, and renewable energy, long-duration energy storage is becoming increasingly important. Qnetic is developing a kinetic energy storage system designed to provide long-lasting, chemical-free electricity storage, offering investors exposure to the infrastructure supporting a more resilient and reliable power grid.

EquityMultiple

For accredited investors looking beyond stocks and bonds, EquityMultiple provides access to vetted commercial real estate deals starting at $5,000, with only ~5% of opportunities passing their due diligence process.

BluSky AI

As artificial intelligence drives unprecedented demand for computing power, the infrastructure behind it is becoming just as important as the software itself. BluSky AI is developing modular, prefabricated data centers designed to bring AI compute capacity online faster than traditional builds, giving investors exposure to a critical layer of the rapidly expanding AI ecosystem through its Regulation A offering.