US government doubles Treasury buyback program to stabilize bond market

The US Treasury is throwing nearly $1 trillion in firepower at a bond market that’s been running a fever. Treasury Secretary Scott Bessent announced a doubling of the government’s buyback program for longer-dated securities, a move designed to cool yields that had climbed to levels not seen since 2007. The expanded program will increase the maximum size of buyback operations from $2 billion to at least $4 billion per operation, covering both the 10- to 20-year and 20- to 30-year sectors. The changes take effect September 9 and run through November 4, 2026, adding an estimated $14 billion in additional buybacks to the roughly $69 billion in Treasury purchases already planned across all maturities this quarter. What triggered the expansion The 30-year Treasury yield had surged to a 19-year high before Bessent’s announcement, driven by a cocktail of factors that made long-dated bonds particularly vulnerable. Thin summer trading conditions combined with a wave of corporate bond issuance, much of it tied to AI infrastructure buildouts, created unusual selling pressure at the long end of the yield curve. When companies issue bonds, they often hedge by selling Treasuries, which pushes gov...