Treasury Secretary Scott Bessent Doubles Long-Dated Bond Buybacks
Treasury Secretary Scott Bessent is moving to relieve pressure at the long end of the U.S. yield curve without waiting for the Federal Reserve. On August 19–20, the Treasury said it will double its buybacks of 10- to 30-year Treasuries to at least $4 billion per operation, up from $2 billion previously. The expanded buyback schedule will run from September 9 through November 4.
The announcement comes as 30-year Treasury yields rose to 5.27–5.29%, the highest level in 19 years, a move that raises borrowing costs across the economy—from federal financing to corporate debt and mortgages.
Market participants likened the move to a modern version of a "twist" strategy: buying long-dated bonds to lean against long-term yields, potentially funded by issuing more short-term debt. The approach aims to reshape the yield curve without direct coordination with the Federal Reserve or expanding the money supply.
Initial price action suggested some impact. Long-end yields fell by roughly 9–10 basis points after the announcement, the U.S. dollar weakened, and the 30-year Treasury–swaps spread tightened, a signal that supply pressure in long bonds may have eased. The move quickly faded as yields rebounded.
Skepticism reflects the scale mismatch. U.S. national debt now exceeds $40 trillion, and the fiscal deficit reached $1.8 trillion in the first 10 months of fiscal 2026. Against that backdrop, $4 billion per buyback operation is viewed by some investors as too small to materially change the supply-demand balance.
The buyback expansion also fits into a broader set of Treasury actions. On July 31, the department carried out its first U.S. yen purchases in three decades. Earlier in August, the Treasury signaled it was considering reducing long-term bond issuance, a step that would reinforce buybacks by curbing supply.
Investors are likely to judge the strategy by where 30-year yields trade during the September–November window. If yields move meaningfully below recent highs and hold there, the program may be seen as effective. If yields return toward 5.3% or higher despite the increased buybacks, pressure could build for a much larger effort or a shift to a different approach.
