Bessent Berates Warren in Caustic Letter, Accuses Top Democrat and Staff of Financial Illiteracy

Treasury Secretary Scott Bessent is accusing Senator Elizabeth Warren of being economically “illiterate” and insincere about her concerns over rising interest rates and escalating bond buybacks.In a taut response to a query sent last week by the top Democrat on the Senate Banking Committee, the Treasury secretary offered to send a copy of “Fixed Income for Dummies” and accused Ms. Warren of character assassination of Treasury employees. The biting missive follows a barrage of mail to the Treasury secretary from Senate minority members responsible for overseeing monetary policy and regulatory issues at the Treasury Department. “I have received your October 7 letter, which adds to the mounting body of evidence of your complete paucity of knowledge about financial markets,” Mr. Bessent wrote to her in a letter dated Friday. “You blamed the economic consequences on the Federal Reserve, rather than your own irresponsible fiscal policies. Your view of the economy depends on who occupies the White House, but your woeful understanding of the issues is consistent,” he said.Senator Warren, in her latest letter, which was first reported by Bloomberg, asked about the U.S. Treasury’s buyback program, a debt-management operation for Treasury to repurchase outstanding securities before maturity to support market liquidity and manage cash flows. The effort does not directly reduce total federal debt, which is hovering around $40.5 trillion this month. The 10-year Treasury bond yield spiked last month to 5.34 percent and now sit at 5.24 percent.Critics, including Mr. Bessent’s mentor and former colleague at Soros Fund Management, Stanley Druckenmiller, have expressed concerns that the buybacks are having the opposite effect of what is intended — increasing rather than reducing borrowing costs and driving down confidence in the government’s fiscal policy and spending.“Buybacks are not designed to lower rates, and they are financed by issuing new debt, which only adds to the pressure pushing rates higher,” Ms. Warren wrote, citing news reports, think tanks, and Treasury’s own press releases. “Further, the administration’s casting about for various measures to reassure the markets is undermining the longstanding strategy that Treasury issuance — and buybacks — should be ‘regular and predictable’ to keep financing costs lower over time.”During an appearance on “Fox and Friends” on Sunday, Mr. Bessent criticized Ms. Warren in personal terms, claiming she only cares about inflation and high interest rates when a Republican is in the White House. “Senator Warren loves to write letters. More than writing the letters, she loves to leak ‘em to the press,” the secretary said, calling her and her staff’s financial literacy “embarrassing.”“The shocking thing here, she is the ranking member on the Senate Banking Committee and she is on [the] Senate Finance [Committee],” Mr. Bessent said. Of her Senate office, Mr. Bessent asked, “What do they do all day? Do they sit around and sip herbal tea and think about raising taxes?”In his letter, Mr. Bessent noted that the Treasury buyback program has been underway since May 2024. He claimed Mr. Warren voted for legislation during the Biden administration that increased inflation and against Trump-era legislation that he said has put more cash into Americans’ hands. He also criticized her for her “malign characterization” of Treasury’s domestic finance team in an interview with Punchbowl News last week.“It is ironic that you have voted against every presidential appointee for a position at Treasury, no matter how impressive the qualifications for the role. Given your newfound interest in Department personnel, I challenge you to reverse course and thoughtfully engage with future nominees and support their confirmation,” he said.While oversight can create a hostile relationship between lawmakers and the administration, Mr. Bessent and Ms. Warren have one of the most antagonistic dynamics between any cabinet member and member of Congress. He has accused Ms. Warren of being a “Peronist.” In the latest exchange ahead of Columbus Day, he signed off with a reference to her claim of Native American heritage by wishing her a “Happy Indigenous People’s Day in advance to you and your family.”Ms. Warren has written to Mr. Bessent on a number of occasions about the Trump administration’s policies on international economic and programs meant to strengthen the economies of countries like Japan and Argentina. When the administration announced a currency swap for the Argentine government last year, Ms. Warren introduced legislation to block the “bailout” of President Javier Milei, a libertarian who is close with the Trump administration. Lawmakers often write to administration officials with the expectation that the letters will be answered in a matter of weeks. The biting and rapid replies by Mr. Bessent foreshadow where his relationship with Ms. Warren may devolve to if the Democrats win a majority in the Senate in November and she takes over the Banking Committee next year. In August, in response to her questions about Japan’s debt, Mr. Bessent wrote a letter to Ms. Warren recommending a tutorial on “Foreign Exchange for Dummies.” He also accused her of appearing “to view preventable crises not as failures to avert but as welcome opportunities to expand government control —with ordinary Americans paying the price.”Mr. Bessent referenced the August letter in his latest response, in which he also berated her past career as a Harvard law professor. “[M]y offer of a Foreign Exchange for Dummies tutorial still stands and if you receive a passing grade on the Yale metric, not the Harvard curve, I would be happy to also include a Fixed Income for Dummies,” he wrote.

Bessent Berates Warren in Caustic Letter, Accuses Top Democrat and Staff of Financial Illiteracy

Bessent Berates Warren in Caustic Letter, Accuses Top Democrat and Staff of Financial Illiteracy

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