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Treasury doubles buybacks of 10 to 30 year debt to $4 billion
The Treasury move comes as long-dated yields had been rising on competition for capital and deficit worries, U.S. sovereign debt is at a record $40 trillion.
The Treasury announced Wednesday that it is doubling the size of its program to buy back longer-dated U.S. Treasuries, expanding operations for securities with maturities between 10 and 30 years to $4 billion per operation, Reuters reports. The buyback plan targets a segment of the curve that had seen borrowing costs rise amid growing demand for capital tied to AI data-center buildouts and concerns over government deficits.
Reuters notes that long-dated yields initially fell after the announcement, before resuming an upward push on Thursday even as Treasury Secretary Scott Bessent said the buyback effort could be expanded further. In an interview Thursday on CNBC, Bessent said the Treasury is signaling confidence that yields do not reflect underlying fundamentals.
The decision also raised questions about whether Treasury actions could complicate the Federal Reserve’s efforts to maintain price stability, given potential knock-on effects on broader credit conditions. Bessent said any changes to the Fed’s balance sheet from runoff would be handled through coordination, and he said a potential rate hike would not be connected to the buyback decision.
The article adds that Fed Chairman Kevin Warsh last month kept the policy rate unchanged in a 9-3 decision while reaffirming a commitment to bring inflation back to 2%. Warsh also emphasized that the Fed should take cues from markets rather than try to steer them, with the story describing his preference for allowing market forces to shape the yield curve.