US Treasury at Least Doubles Long-Term Bond Buybacks Starting September 9, Pushing 30-Year Yield Down 10 Basis Points

Treasury Secretary Scott Bessent announced Wednesday that the US Treasury will at least double the maximum size of its liquidity support buyback operations for 10- to 30-year debt, raising the cap from $2 billion to at least $4 billion per operation, with the accelerated program set to begin September 9. The move, which came just two weeks after the Treasury released its regular quarterly buyback schedule, targets the 10-to-20-year and 20-to-30-year segments of the market, which have been under significant selling pressure since late June and had pushed long-term yields to multi-year highs. The announcement sent yields sharply lower: the 30-year bond fell as much as 10 basis points to 5.18%, while the benchmark 10-year note dropped 6 basis points to 4.647%.

The dollar also declined. Stock market futures rose sharply in response. Analysts at Evercore ISI characterized Bessent as an activist Treasury secretary showing tactical skill, though they expressed skepticism that the buyback increase would have a material impact over a more extended period given unchanged financing fundamentals.