Dollar Edges Up on Treasury Bond Buybacks Amid Debt Concerns

The US dollar edged up on Monday after three weeks of decline that sent it to its lowest level in three months. The move came as the Treasury Department announced plans to double the size of its liquidity support buyback operations for longer-dated notes and bonds.

According to Reuters, two senior Treasury officials told CNBC that Secretary Scott Bessent could use near $1 trillion General Account funds to help finance bond buybacks instead of issuing short-term bills. The dollar then pared some gains after the report, along with longer-dated Treasury yields.

Brian Jacobsen, chief economist at Annex Wealth Management, questioned the effectiveness of using a 'bazooka' to combat debt issues, stating that lower long-end bond yields may make the government's debt burden even more sensitive to changes in the Fed's policy rate.