WASHINGTON
Treasury Secretary Scott Bessent announced an expansion of the buyback program for longer-dated U.S. government securities, targeting the 10-to-30-year portion of the yield curve after 30-year Treasury yields climbed to their highest levels since 2007.
Bessent characterized the bond market as running hot. "My job is to try to push things back towards equilibrium," he said at a Washington event. "I don't believe that I can change the equilibrium price. But nothing's ever in equilibrium."
The expanded program mirrors the Federal Reserve's Operation Twist strategy—selling shorter-dated Treasuries to finance purchases of longer-dated securities. The first scheduled operation targeted the 10-to-20-year and 20-to-30-year segments, which have experienced reduced institutional demand since late June.
Bessent dismissed the notion that selling pressure stems from credit concerns about U.S. borrowing. He noted that if such worries were real, global investors would be rotating out of dollar assets into alternatives like German government bonds. "U.S. bonds are currently the best performing" relative to comparable foreign sovereigns, he said.
Bessent rejected comparisons to quantitative easing, the open-ended asset-purchase tool the Federal Reserve deployed during crisis periods. "I'm not doing QE," he stated. The Treasury Department plans to finance the buybacks using funds from its nearly $1 trillion General Account.
Wall Street analysts cautioned that the scale of Treasury intervention may prove insufficient to arrest the selloff. The long-end curve has suffered multiweek deterioration, and a buyback program, however expanded, faces structural headwinds in a rising-rate environment.
