Citadel Securities Is ‘Short Bonds’ and Treasury Is ‘Crushing Their Squeeze,’ Says Analyst Nicholas Mugalli as Firm Calls Buybacks ‘Financial Repression’

World Trade Securities CEO Nicholas Mugalli has publicly called out Citadel Securities, claiming Ken Griffin’s firm is “short bonds” and complaining about Treasury Secretary Scott Bessent’s expanded buyback operations because the official yield caps are “crushing their squeeze”—Citadel Securities characterized the intervention as ‘financial repression’ at the margin.

Behind Citadel’s ‘Financial Repression’ Critique

In a recent macro note, Citadel Securities strategist Nohshad Shah criticized the Treasury’s decision to double its 10- to 30-year bond buybacks from $2 billion to at least $4 billion per operation.

Shah described the intervention as “financial repression at the margin,” arguing that policymakers are trying to suppress market signals rather than fix underlying fiscal problems caused by procyclical easing.

However, Mugalli countered on X that Citadel Securities’ sudden alarms over inflation hide a self-serving market position. “And by the way, Citadel is short bonds, so when Bessent uses the TGA to cap yields with buybacks, they scream ‘financial repression,'” Mugalli posted. He further added that “crying about inflation now is just Citadel trying to talk the bond market down so they can cover.”

Squeezing the Shorts and the Old Quantum Playbook

Mugalli suggested that instead of complaining, legendary macro traders would historically exploit such Treasury maneuvers. Reflecting on past heavyweights, he noted: “I wonder what Bessent, Soros, and Druckenmiller would do if they were still at Quantum Fund… They’d smell blood in the water and squeeze the Treasury until the yield curve broke completely.”

While Mugalli agrees with Stanley Druckenmiller‘s recent high-profile op-ed calling for the government to “let the bond market speak”, he asserts that current Wall Street outrage over the Treasury’s actions is largely driven by massive short-sellers who are unexpectedly caught on the losing side of official liquidity support.

How Have Stocks and Bonds Performed?

At the last check, the 30-year Treasury bond yielded 5.23%, the 10-year Treasury bond was at 4.70%, and the two-year bond was at 4.24%.

The primary ETF specifically tracking the long end of the U.S. Treasury yield curve—including the 30-year benchmark bond—is the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), which closed 0.62% higher at $82.56 on Monday. It was lower by 6.03% year-to-date, down 0.83% over the last month and 5.16% over the last year.

The S&P 500 index has advanced 11.58% year-to-date. Similarly, the Nasdaq Composite index was up 11.81%, and the Dow Jones gained 10.41% YTD.

On Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq-100, respectively, closed lower. The SPY was down 0.29% to $763.47, while the QQQ declined by 1.00% to $706.32. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), ended 0.27% higher at $533.65.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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