Bessent Says Treasury Bond Buybacks Could Exceed $4 Billion Per Issue as US Moves to Cap Long-Term Yields

Treasury Secretary Scott Bessent said on Thursday that the department's buyback operations for longer-dated Treasury securities could exceed $4 billion per issue, going beyond an already-announced doubling of scheduled purchases. The Treasury had announced Wednesday that it would at least double its scheduled $2 billion in buybacks of longer-dated government debt, a move that sent yields sharply lower. Bessent told CNBC that Treasury intends to "make a market" in longer-dated securities where yields have been surging, adding that the department would assess market conditions and take further action if needed, describing Treasury as having "a big tool kit." He also signaled a push for fiscal consolidation aimed at curbing the deficit and reducing borrowing costs, and suggested that companies issuing debt should favor 5-year maturities over longer-term instruments.

The moves are designed to keep the bond market "in equilibrium," Bessent said. The buyback announcement initially steadied markets, spurring rallies in stocks, silver, and crypto, but gains were subsequently wiped out by geopolitical pressure tied to a Trump threat regarding Iran. Questions are also mounting about coordination between Bessent and Fed Chair Kevin Warsh, with economists noting that aggressive buybacks of long-dated debt could complicate the Fed's price-stability mandate.