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US Treasury will keep regular bond auctions as buybacks expand
Longer-dated bond buybacks are set to begin with 10- and 20-year operations on 10 September, even as the Treasury has not yet disclosed how it will fund the larger purchases.
The US Treasury plans to continue its regular schedule of debt auctions, including sales of longer-dated bonds, as it expands its Treasury buyback program, according to comments by Secretary Scott Bessent reported by Reuters.
Bessent said the department would proceed with the auction plan outlined earlier this month, despite the shift toward larger longer-maturity purchases. The Treasury has not yet made purchases under the expanded program, with the first larger operations for 10- and 20-year bonds due to start on 10 September.
The announcement followed Bessent doubling the size of quarterly purchases of longer-maturity debt after long-term Treasury yields rose to their highest levels in nearly two decades. After the initial announcement, yields fell across the 10-, 20- and 30-year parts of the curve, though much of that drop was later reversed, with long-term yields edging lower again on Monday.
The Treasury has not yet detailed how it will fund the expanded buybacks. One potential funding source is the Treasury General Account, which held roughly $940 billion as of last Wednesday versus about $840 billion on average over the past year, with that cash built up partly to cover about $166 billion in refunds owed to importers following a Supreme Court ruling related to tariffs. The Treasury says the purchases are intended to improve market functioning in the longer-dated segment, which can become thin during periods such as August.