U.S. Treasury Secretary Bessent Says Bond Buybacks Could Be Expanded Beyond $4 Billion

[Financial News] The U.S. Department of the Treasury has suggested that it could significantly expand its long-term Treasury buyback program beyond the previously announced $4 billion, as it seeks to stabilize recently surging bond yields.
In an interview with CNBC on the 20th (local time), Scott Bessent said the Treasury would provide liquidity to the long-term bond market, where yields have recently jumped, and help support market functioning.
The Treasury had previously announced that it would double the size of its long-term Treasury purchases from $2 billion to $4 billion. Bessent's remarks were seen as a sign that the department is prepared to take additional steps depending on market conditions.
Bessent said, "We are going to increase the size of the buybacks, and it could exceed $4 billion per round." He stopped short of giving a specific figure, adding, "We will look at the market and analyze it, and our goal is to keep the market focused on fundamentals rather than headlines during quieter trading periods."
Immediately after his remarks, Treasury yields, which had been rising, briefly moved lower. They later rebounded, with the U.S. 30-year Treasury trading around 5.235%. The 30-year yield has recently surged to levels not seen since before the 2008 global financial crisis, adding pressure to the market. The benchmark 10-year Treasury note also retreated right after his comments, but soon turned higher again, rising by about 5 basis points to 4.704%.
Bessent described liquidity in the 30-year Treasury market as "very poor" and said current yield levels do not reflect the fundamental state of the U.S. economy. "We have a range of policy tools, and this move is meant to send a signal to the market that current yields are not properly reflecting economic fundamentals," he emphasized.
Several negative factors have been pushing U.S. Treasury yields higher in recent months. Rising national debt and fiscal deficits, competition from corporate bond issuance tied to Artificial Intelligence (AI), higher yields in major markets such as Japan, and a growing risk premium for holding long-term debt have all contributed to the upward pressure.
Meanwhile, Bessent said he is scheduled to meet with Russell Vought, director of the Office of Management and Budget (OMB), to discuss fiscal consolidation after the Treasury announced this week that U.S. national debt had surpassed $40 trillion.
He said, "The $40 trillion figure itself does not have any special meaning, and we can overcome it through growth." He added, "Our message to allies and trade partners is that global economic growth is the key to solving this enormous mountain of debt."
[email protected] Yoon Jae-jun Reporter