Claims

The biggest concern with the restructuring plan is inflation, as multiple pathways (tariffs, currency devaluation, geopolitical fracturing) would likely result in higher inflation, which would in turn drive up interest rates, ending the era of 'cheap money' that has characterized economic policy since the 2000s

Scott Bessent has publicly stated 'we don't care what the Fed does, we want to get the 10-year yield down,' signaling that the administration's primary focus is reducing long-term interest rates, which the restructuring plan is intended to accomplish by reducing the supply of 10-year treasuries in the market

The Fed's rate-hiking campaign was justified publicly as fighting inflation, but Gromen has upgraded his estimate from a 5% to a 50-70% probability that the Fed is actually weaponizing the dollar against Russia and OPEC to break oil demand, based on the pattern of the Fed not responding to market dysfunction in treasuries, gilts, and mortgage markets the way it did post-2008.

Between loss of liquidity in the U.S. treasury market or unemployment catching Fed attention, the treasury market problem arrives first because the treasury market is already experiencing dysfunction and will worsen almost without fail unless the Fed steps in with QE, while unemployment effects lag.

In February 2022, Fed-adjacent officials (Zoltan Pozsar at Credit Suisse and Bill Dudley, former NY Fed President) publicly stated 'we need to crash stocks to get inflation down,' revealing that the Fed knew the wealth effect on boomer spending was the driver of inflation, not broad monetary excess.

The entire post-2008 financial system was predicated on a bet that inflation would never return; once inflation appeared, policymakers faced a trilemma: get inflation down (breaking markets and economies), reserve the debt (devaluing the currency), or accept the structural unsustainability (and face emerging-market-style dynamics).

Central banks and governments use quantitative easing and zero/negative interest rate policies to artificially prop up markets; these are emergency tools used continuously beyond their intended scope, enabling unlimited money creation to prevent market crashes