Title: Haymaker Daily — O for 3 On The Three 3s Show: Haymaker (Substack) Author: David Hay / The Haymaker Team Date: 2026-08-26 (AUG 26, 2026) URL: https://haymaker.substack.com/p/haymaker-daily-602 Note: Written post — no timestamps. Paid post; body captured via Stephen's logged-in session. Verbatim body below (disclosures omitted).
Hello, Haymakers:
Life is full of ironies and one of the most ironic is what's happening to Treasury Secretary Scott Bessent. As discussed in yesterday's Daily, he's in a major tussle with the long-term Treasury Bond market as he attempts to keep yields from ripping higher.
The irony stems from his much ballyhooed plan during the early months of the Trump administration to achieve a 3% real GDP growth rate, three million barrels per day of increased oil production and, most relevant to this note, a 3% budget deficit.
Unfortunately, the administration has achieved none of those objectives.
To be fair to Mr. Bessent and the rest of Team Trump, the GDP target hasn't been "bigly" missed. That has averaged roughly 2% since he unveiled his Three 3s in late November 2024. However, the second two have been total whiffs.
U.S. oil output has increased by just 400,000 barrels/day, despite the incentive of higher prices caused by the war against Iran. Yet it's the budget deficit target that is a particularly glaring miss.
For those who recall another highly publicized early initiative of the Trump administration, Elon Musk's Department of Government Efficiency or DOGE, the fact that red ink is once again rising, instead of dramatically contracting, is borderline comical considering the intent.
DOGE's initial goal in the fall of 2024 was to slash federal outlays by $2 trillion. By February, that was revised to $1 trillion. Two months later, the objective was reduced to around $200 billion. The reality is U.S. government expenditures have increased by approximately $300 billion.
More problematic is that the federal deficit as a percentage of GDP is running near 6%, basically double Mr. Bessent's 3% target. Unfortunately for what's left of America's fiscal probity, there is no improvement in sight.
[David Stockman chart]
In practical terms, it may be even worse as a result of a tsunami of new issuance. Per the venerable Jim Grant, the lead author of Grant's Interest Rate Observer, the new supply of Treasuries held by the public has surged by 8.4% on a year-over-year basis. Besides implying the government's accounting is overly flattering to the actual deficit, this supply deluge is making Mr. Bessent's job of holding down long-term interest rates challenging in the extreme.
His stealth attempts at so-called Yield Curve Control (YCC) have already weakened the dollar and, more graphically, reignited vigorous rallies in gold and Bitcoin. While trying to put a lid on long-term Treasury yields might be politically expedient, Mr. Bessent should bear in mind that Japan's multi-decade experiment with YCC was a prime factor in the yen's 40% value shrinkage vs the dollar over the past decade.
Relative to gold, the yen's value loss has been truly breathtaking, exceeding 80%. This vividly illustrates the extreme monetary debasement risk of YCC policies.
[Bloomberg chart]
The Haymaker Team