U.S. Treasury Secretary Bessent Suggested an Even Larger Buyback of Treasury Bonds

The amount of Treasury bonds to be repurchased could exceed $4 billion, U.S. Treasury Secretary Scott Bessent said in an interview on CNBC. “We have a wide range of tools at our disposal, so we’ll see. In part, this is about sending a signal to the market: we want to show that, in our view, current yields do not reflect fundamentals,” said the Treasury Secretary.

Just the day before, in an attempt to calm the market, the agency announced that it would at least double the size of its long-term bond purchase program. Previously, the maximum size of a single transaction was $2 billion; it has now been raised to $4 billion. However, the effect of this decision was short-lived: yields reacted with a sharp drop, but the sell-off of government bonds continued on Thursday. Following Bessent’s latest comments, yields on 10- and 30-year bonds remained elevated.

Investors remain concerned about the significant U.S. budget deficit and inflation risks amid protracted negotiations to end the war with Iran. The rapid growth in borrowing by AI companies, which is increasing the supply of bonds, is putting additional pressure on the debt market.

The surge in Treasury yields, in turn, is driving up the cost of servicing the U.S. national debt, which has reached a record $40 trillion. The Donald Trump administration plans to announce “an increased focus on fiscal consolidation” “this week or early next week,” Bessent told CNBC. According to him, the government is considering measures to both increase budget revenue and reduce spending.

This news story is being updated.

This article was AI-translated and verified by a human editor