Bessent Says Expanded Treasury Buybacks Aimed to Cool Yield Surge; Next Purchase Size in Focus

Treasury Secretary Scott Bessent said the U.S. Treasury’s surprise decision last month to expand buybacks of long-term Treasuries was meant to calm an excessive rise in yields and return the market to balance.

Bloomberg reported on September 8 that Bessent, speaking at an event in Washington, said his role in expanding Treasury buybacks was to “push the market back into balance.”

He said he does not believe he can change the market’s equilibrium price itself, adding that “there is no perfect equilibrium in the world.” The comments suggest the Treasury is not trying to engineer a specific level for yields, but rather to ease one-sided moves when the market becomes overly stretched.

Bessent also compared recent bond-market moves to a “fever.” Referring to last month’s Treasury selloff, when concerns about U.S. fiscal health spread through the market, he indicated the expanded buybacks were intended to cool that overheating.

The Treasury announced on August 19 that it would at least double the size of buybacks for Treasuries maturing in 10 to 20 years, increasing the amount from $2 billion per operation. Because the move came outside the regular quarterly borrowing plan announcement, markets viewed it as a sign the department had begun responding more aggressively to rising long-term yields.

At the time, the 30-year Treasury yield had climbed to its highest level since 2007, with selling pressure concentrated in longer-dated debt. After the announcement of the expanded buybacks, long-term Treasury prices rose and yields fell.

Bessent’s latest remarks came ahead of the first actual purchase under the expanded buyback program. The Treasury is set to disclose the size of its next buyback targeting 10- to 20-year Treasuries, and the market is focused on how far the amount will exceed the new $4 billion minimum.

Market participants see the size of the first purchase as a gauge of how aggressively the Treasury intends to step into the long-bond market going forward. A larger-than-expected amount could reaffirm the department’s resolve to restrain further increases in long-term yields, while a purchase of about $4 billion could be seen as falling short of market expectations.