Treasury Boosts Buybacks Amid Fed Policy Tensions
The US Treasury announced on Wednesday that it would double its long-end buyback cap to at least $4 billion per operation, as part of its liquidity support program. This move came a day after the announcement, and the impact was short-lived as the 30-year yield fell by 9 basis points.
Treasury Secretary Bessent now has two open requests that require approval from the Federal Reserve, which is set to deliver a keynote address at the Jackson Hole symposium on Friday. Fed Chair Kevin Warsh's stated program aims to reduce long-dated yields, but this contradicts the administration's goals.
The symposium's focus on payments and stablecoins is relevant given the current market trends. Stablecoin demand has stalled alongside crypto this year, with growth expected to resume within three months.