Bessent says Treasury buyback operation could be more than $4 billion
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- Bessent said the accelerated buyback of longer-dated government debt "could be more than the $4 billion per issue" announced Wednesday, declining to attach a firm figure and tying the final size to market conditions.
- Treasury announced Wednesday it would double its scheduled $2 billion buyback to $4 billion in longer-dated securities, which initially sent yields sharply lower before much of the decline reversed.
- Bessent called liquidity for the 30-year bond "very poor" and said current trading levels did not reflect underlying fundamentals, describing the intervention partly as "signaling" to refocus the market.
- The 30-year bond was trading around 5.235% — levels not seen since before the 2008 financial crisis — while the benchmark 10-year yield briefly pulled back on Bessent's remarks before rising about 5 basis points to 4.704%.
- Bessent said he would meet with OMB head Russell Vought to discuss "fiscal consolidation," after Treasury figures showed the national debt crossed the $40 trillion mark this week; he added there is "nothing magic" about that number and the U.S. can "grow our way out" of it.
- Bessent listed multiple drivers of the yield surge — rising U.S. debt and deficits, AI-related corporate debt issuance, higher yields from sovereigns such as Japan, and escalating term premiums.
Why it matters: Treasury is intervening directly in a $40 trillion debt market where the long end has decoupled from fundamentals, with the 30-year at 5.235% and 10-year at 4.704%. Bessent's open-ended pledge to go beyond $4 billion signals that the Treasury views current yields as disorderly rather than informative — a stance that buys time for fiscal consolidation talks with Vought but raises the bar for any future administration letting yields drift higher.
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