Citadel Securities reverses bearish long-bond call, warns of short unwind
Citadel Securities has reversed its bearish stance on long-dated U.S. government bonds, warning that the trade against them has become so crowded that any shift in direction could force a painful unwind. The firm described the U.S. Treasury's expanded bond buyback program as a form of Operation Twist, aiming to reduce the duration the private market must absorb and put downward pressure on long yields. Citadel Securities also suggested the intervention might be linked to supporting the Japanese Ministry of Finance and limiting the risk of forced Treasury sales by Japanese investors. However, the firm cautioned that such interventions do not resolve underlying fiscal pressures, and if bond prices are held artificially high, the adjustment may come through a weaker dollar and increased inflation. This view contrasts with Stanley Druckenmiller, who called the Treasury's buyback expansion a
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