Treasury doubles debt buybacks as Bessent moves to steady bond market
The announcement targets the sensitive longer-duration part of the Treasury market.
TL;DR
- Treasury will at least double the maximum size of its buyback operations, from $2 billion to at least $4 billion.
- The buyback increase targets the 10- to 20-year and 20- to 30-year segments of the Treasury market.
- The initiative is set to begin September 9 and continue through November 4.
- Yields on the 10-year note fell 5.7 basis points to 4.647%, and the 30-year bond dropped 9 basis points to 5.196% following the announcement.
- Some analysts view the move as a form of 'yield curve control' that may not address underlying fiscal deficits.
- Concerns exist that artificially suppressing yields could make it harder for the Federal Reserve to manage inflation.