Treasury Secretary Scott Bessent said Thursday that the department’s accelerated buyback of longer-dated government debt could exceed the announced $4 billion per issue, according to a live interview on CNBC.
Bessent said the Treasury is going to “make a market” in longer-dated securities where yields have been climbing sharply. His remarks came a day after the department announced it would double its scheduled $2 billion in buybacks for longer-dated debt, a move that initially pushed yields lower.
“We’re going to increase the size of the buyback,” Bessent said. “I would note that it could be more than the 4 billion per issue.”
The comments provided some modest relief in the bond market, though yields had largely reversed the decline that followed Wednesday’s announcement. The 30-year Treasury bond was recently trading around 5.235%, a level not seen since before the 2008 global financial crisis.
Bessent acknowledged the pressure at the long end of the curve, suggesting that current trading levels do not reflect economic fundamentals. “We have a big toolkit, so we’ll see,” he said. “Part of it is signaling here and to show that we believe that the yields don’t reflect the underlying fundamentals.”
He also described liquidity for the 30-year bond as “very poor,” which he said provided another reason for the Treasury to intervene in what is normally a deep and active market.
Multiple forces have combined to push yields higher, including surging U.S. debt and deficits, competition from corporate debt issuance tied to artificial intelligence, higher yields from other sovereigns such as Japan, and rising term premiums — the extra compensation investors demand for holding longer-dated government debt.
On the fiscal front, Bessent said he plans to meet with Russell Vought, director of the Office of Management and Budget, to discuss “fiscal consolidation.”
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Source: www.cnbc.com — https://www.cnbc.com/2026/08/20/bessent-says-treasury-buyback-operation-could-be-more-than-4-billion.html
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