Stanley Druckenmiller said at a closed-door meeting in New York on Sept. 11 that U.S. borrowing costs are "even a little low" and that rate cuts are no longer necessary. He also said Federal Reserve officials who still view monetary policy as restrictive are "ridiculous." Druckenmiller argued that, given the state of the U.S. economy, a capital spending boom, and competition for capital, Treasury yields are not especially high. He said the recent rise in yields has been a slow move driven by fundamentals and does not worry him. At the time of his remarks, the 30-year U.S. Treasury yield briefly climbed to 5.35%, the highest level since 2007, while the 10-year yield approached 5%.
He also commented on artificial intelligence and currencies. Druckenmiller said most of Duquesne Capital’s recent profits came from AI investments, but that the firm’s AI position has been cut to 20% of what it was six months ago. He said the AI build-out phase may be nearing a later stage, that markets need to be more cautious, and that corporate earnings may be in a bubble fueled by the AI investment boom. In foreign exchange, he said he does not want to short the U.S. dollar because the United States has a clear global edge in AI. He added that he has been short the euro and the British pound since the start of the year, though those positions are much smaller than his past currency bets.
BlockBeats reported on Sept. 11 that veteran Wall Street investor Stanley Druckenmiller said at a closed-door meeting in New York that U.S. borrowing costs are "even a little low" and that rate cuts are no longer necessary. He also said Federal Reserve officials who still think monetary policy is restrictive are "ridiculous."
Druckenmiller is described as a longtime mentor to U.S. Treasury Secretary Bessent and Federal Reserve Chair Warsh, and also as a close friend of Warsh. He said Treasury yields are not high when judged against the condition of the U.S. economy, the current capital expenditure boom, and the competition for capital. He added that the recent rise in yields has been a slow process driven by fundamentals and is not something that concerns him.
At the time of his remarks, the 30-year U.S. Treasury yield briefly rose to 5.35%, the highest level since 2007, while the 10-year yield moved close to 5%.
On artificial intelligence, Druckenmiller said most of Duquesne Capital’s recent profits came from AI investments, but that the related position has now been reduced to 20% of its level six months ago. He said the AI build-out phase may be nearing a later stage, that markets need to start being cautious, and that corporate earnings may be sitting in a bubble driven by the AI investment boom.
In foreign exchange, Druckenmiller said he does not want to short the U.S. dollar because the United States holds a clear global advantage in AI. He added that he has been short the euro and the British pound since the start of the year, though those positions are far smaller than his past currency bets.
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