Treasury Aims to Tame Long-Term Yields with Bigger Debt Buybacks

US Treasury Secretary Scott Bessent told CNBC that the government may increase its debt buybacks, which could exceed $4 billion per operation. This move aims to steady a rattled long-term Treasury market and comes as bitcoin trades above $72,000.

The Treasury Department has doubled the maximum size of liquidity-support buybacks for longer-dated government securities, with the new floor jumping from $2 billion to $4 billion per operation starting September 9. Bessent noted that this could be just the beginning, stating 'We're going to increase the size of the buyback.'

The goal is to inject liquidity and prop up prices in corners of the bond market where trading has grown strained. However, the program's limits are exposed by its relatively small size compared to the broader Treasury market.

Bessent framed the move as a warning to markets that current yields do not reflect underlying economic fundamentals. The timing is significant, with the 30-year Treasury yield reaching its highest level since 2007 and total US public debt cracking $40 trillion.