U.S. Treasury Secretary Scott Bessent indicated that the department’s recently expanded program of longer-dated bond buybacks could exceed the $4 billion per operation ceiling announced on Wednesday. Speaking in a CNBC interview, Bessent said the Treasury would increase the size of the operations and that the final amount would depend on market conditions.
The original plan doubled the maximum size of liquidity-support buybacks for securities in the 10-to-20-year and 20-to-30-year sectors from $2 billion to at least $4 billion, effective from early September through early November. The announcement initially pushed the 30-year yield lower by the most in a single day since last October, but much of that decline reversed on Thursday.
Bessent described the program as an effort to support orderly trading in a seasonally thin market rather than an attempt to dictate the level of yields. He argued that current yields do not fully reflect underlying economic fundamentals and pointed to the ongoing Iran conflict and weak liquidity at the long end of the curve as contributing factors.
The 10-year Treasury yield traded near 4.70 percent on Friday while the 30-year remained close to levels last seen nearly two decades earlier. Market participants have expressed skepticism that the buyback volumes will be large enough to offset structural pressures from elevated deficits, inflation concerns and heavy corporate issuance linked to artificial-intelligence infrastructure spending.
Bessent also previewed an upcoming announcement focused on fiscal consolidation, expected either at the end of this week or early next week, that would examine both the revenue and spending sides of the budget. National debt crossed the $40 trillion mark earlier this week, heightening investor focus on long-term fiscal sustainability.