US Treasury Secretary Bessent doubles US long-bond buybacks in the face of surging yields

U.S. Treasury Secretary Bessent has doubled the size of buybacks for 10- to 30-year Treasury debt securities, from the previously planned $2 billion to at least $4 billion per operation. This move aims to counteract the recent surge in yields, which had unsettled global investors. The increased buyback period will run from September 9 to November 4, impacting bonds with maturities ranging from 10 to 30 years.

The decision came a day after a significant bond selloff drove the 30-year Treasury yield to its highest level since 2007, due to concerns over a potential escalation in the U.S.-Israeli conflict with Iran and the rapidly growing U.S. public debt. The move reflects the Treasury's desire to provide greater liquidity support in longer-dated nominal sectors, where there is consistent strong sponsorship from market participants.

Market analysts noted that the action is a response to potential debt market pressures that could raise borrowing costs and risk broader financial market dislocations. This is the second time this month that Treasury Secretary Bessent has taken action to stabilize the market, following a currency market intervention in early August.

However, some experts raised questions about the lasting impact of the surprise announcement, given the Treasury's ongoing need to finance a significant amount of maturing debt and deficits.