Treasury Secretary Bessent doubles US long-bond buybacks in the face of surging yields

The Treasury will double buyback sizes for 10- to 30-year Treasury debt securities to at least $4 billion per operation. The increase from the previously planned $2 billion buybacks will apply to the 10-year to 20-year sector and the 20-year to 30-year sector and will be effective September 9 through November 4, the department said in a statement. Yields had risen on Tuesday despite a previously scheduled $2 billion buyback operation of 20-year and 30-year bonds that day. The 30-year yield had hit a 19-year high of 5.34% on Tuesday but later subsided. The Treasury's announcement drove it down, last trading at 5.184%. "This increase in buyback operation sizes reflects Treasury's desire to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants, as evidenced by the significant volume of high-quality offers Treasury routinely receives in longer-dated buyback operations," the Treasury said in a statement. President Donald Trump said Americans should not worry about volatility in the bond market. Asked by reporters if Americans should be concerned, Trump said: "No, I don't think so." Market analysts said the Treasury's action reflects sensitivity to debt market pressures potentially becoming more problematic, adding to borrowing costs, keeping mortgage rates high and risking broader financial market dislocations. The yield on the benchmark 10-year Treasury note also was lower on Wednesday, down about 6 basis points to 4.66%. It was the second time this month that U.S. Treasury Secretary Scott Bessent has stepped in to try to counteract market moves, having joined Japan in an August 1 currency market intervention aimed at reversing the yen's slide to recent 40-year lows against the U.S. dollar. But analysts also questioned whether the move would have a lasting impact given that the Treasury still needs to finance a "tidal wave" of maturing debt and deficits. The $2 billion increase is a pittance compared to the $32.2 trillion Treasury debt market as of Monday and about $5.5 trillion in outstanding 20-year and 30-year bonds as of July 31. There was $16.2 trillion of unmatured Treasury notes, which are issued at terms ranging from two to 10 years. The Treasury has for the last two years engaged in scheduled purchases of older-vintage securities prior to their maturity dates to provide liquidity support for those so-called off-the-run bills, notes and bonds. The next currently scheduled buyback operation for 20- and 30-year bonds is set for September 24, with a 10- to 20-year buyback scheduled on September 10. In its quarterly refunding announcement earlier this month, Treasury said it would repurchase up to $69 billion of Treasuries across all maturities between August 6 and November 5. Three more buybacks of 20- to 30-year bonds and four of 10- to 20-year securities are scheduled in that window, adding at least an additional $14 billion of liquidity support and bringing the maximum repurchases to $83 billion. The U.S. Treasury announced support measures for long-duration bonds, stepping in to staunch, at least temporarily, an upward march in yields that had unnerved global investors. The move to double buyback sizes for long-duration debt came after a major bond selloff pushed the 30-year Treasury yield to its highest level since 2007 amid worries of an imminent escalation in the U.S.-Israeli war with Iran and rising concerns over a deteriorating U.S. fiscal picture. Higher bond yields push up borrowing costs, squeezing households, companies, financial markets and the federal budget alike. Total public debt outstanding topped the $40 trillion mark on Wednesday.

Treasury Secretary Bessent doubles US long-bond buybacks in the face of surging yields

Buyback sizes and Treasury's rationale

Market reaction and broader debt concerns

Size of the program versus the debt market

Treasury doubles long-bond buybacks after yield spike

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