US Treasury to stick to debt auction schedule despite bigger buybacks, Bessent says

Treasury Secretary Scott Bessent announced on Monday that the U.S. Treasury will adhere to its regular debt auction schedule, including the issuance of long-dated bonds, despite the recent decision to expand the size of buybacks for 10- and 20-year securities. Bessent, a former hedge fund manager, explained during a news conference focusing on Iran sanctions that the Treasury has not yet initiated the enlarged buybacks, which will commence on September 10 for the longer-dated bonds.

The initial buyback announcement, made last week, aimed to reduce yields on 10-year and 20-30 year Treasuries, which had reached their highest levels in nearly two decades. However, yields on longer-dated maturities have since partially recovered, down modestly by Monday. Bessent also cautioned nations against engaging in business relationships with Iran, threatening secondary sanctions for non-compliance.

He did not disclose the funding source for the bond buybacks but indicated that the Treasury General Account at the Federal Reserve could be utilized, which would draw from the nation's cash reserves rather than issuing new, shorter-term Treasuries.