Scott Bessent doubles Treasury buybacks in bid to tame long-term yields

Treasury Secretary Scott Bessent just pulled one of the oldest levers in the government’s toolkit: buying back its own bonds to push long-term interest rates lower. Starting September 9, the Treasury will double its buybacks of longer-dated bonds, jumping from $2 billion to at least $4 billion per operation. The target: 10- to 30-year maturities that have been climbing to levels not seen in nearly two decades. The 30-year Treasury yield had touched a 19-year high near 5.34% before the announcement on August 19. That’s the kind of number that makes mortgage lenders wince and corporate CFOs cancel expansion plans. Bessent’s message was essentially that these yields don’t reflect where the economy actually stands, and he’s willing to put money behind that conviction. The initial reaction, and the reality check Markets did what markets do when the government shows up with a checkbook. The 30-year yield dropped sharply in the immediate aftermath. Then within two days, yields had largely retraced their decline. By August 20-21, the 30-year settled in a range of 5.24% to 5.28%, while the 10-year hovered near 4.69%. The buyback program is set to run through November 4, giving the Treasury ...