U.S. Treasury Secretary Bessent Amplifies Debt Buybacks to Stabilize Skyrocketing Bond Yields
In a surprise move that sent shockwaves through global financial markets, U.S. Treasury Secretary Scott Bessent announced on Wednesday that the department will more than double its long-dated government debt repurchases. This bold strategy aims to temper borrowing costs that have escalated to levels unseen in nearly two decades.
The Treasury Department confirmed its commitment to “augment, by at least double, the size of liquidity support buyback operations” for securities in the 10-year to 30-year sector. This move lifts the cap from $2 billion to a minimum of $4 billion per operation. The expanded program will run from September 9 through November 4, focusing on the segment of the bond market that has witnessed a buyers’ strike since late June.
Markets reacted swiftly and positively to the news. The benchmark 10-year Treasury yield fell 5.7 basis points to 4.647%, while the 30-year bond plummeted 9 basis points to 5.196%. U.S. stocks advanced, gold soared to its highest level since early June, and the dollar depreciated against all G10 currencies. Asian equities were also poised for a broad rebound on the news. However, analysts warn that this relief may be fleeting, as similar interventions earlier this year yielded only transient effects.
Source: CNBC – Treasury doubles debt buybacks as Bessent moves to steady bond market