US Treasury Seeks Buyback Help Amid Sanctions on Iran
The US Treasury has announced plans to use its 'savings account' at the Federal Reserve for buyback auctions, according to recent news reports. This move comes as the 10-year yield on US government bonds fell slightly to 4.69%.
Treasury Secretary Scott Bessent did not provide any further information on revamping US debt management, and confirmed that the Treasury will continue with its regular program of debt auctions as announced in the last quarterly refunding.
The US has also imposed new sanctions against over 60 entities, targeting five key areas for Iran: digital assets, technology, gold, aviation, and shipping. The move is part of an 'economic D-Day' campaign to isolate the country.
Michael Wan at MUFG notes that rising geoeconomic fragmentation makes it rational for countries to diversify their reserves, trade, and financial linkages away from reliance on any single system, including the Dollar-based one. He references ongoing US-Canada trade tensions and perceived uncertainty around US trade agreements.