Treasury Secretary Scott Bessent Doubles Bond Buybacks to Lower Yields

U.S. Treasury Secretary Scott Bessent doubled the limit for buybacks of 10-year and longer government bonds from $2 billion to $4 billion per operation. The intervention, scheduled for various intervals between September 9 and November 4, 2026, aims to lower long-term yields that have threatened economic growth and kept mortgage rates high. While the move initially caused 30-year Treasury yields to drop 0.1 percentage point—the largest single-day move in a year—yields rebounded by Thursday as investors remained skeptical of the Treasury's ability to offset structural deficits.

Bessent announced the plan as gross federal debt surpassed $40 trillion. He stated the U.S. must grow its way out of this debt and revealed that President Donald Trump tasked him and Budget Director Russell Vought with a new fiscal consolidation initiative. This plan, expected by early next week, may include a fraud task force and cuts to state-level programs. Bessent expressed confidence that Section 301 tariffs would restore federal revenue to previous levels.

The Treasury's actions have created potential friction with Federal Reserve Chair Kevin Warsh. While Bessent seeks to suppress yields, Warsh intends to shrink the central bank's bond holdings and maintain independence from fiscal policy. Additionally, President Trump has pressured Warsh to lower interest rates while simultaneously threatening Iran with a crushing economic operation, a move that has contributed to rising oil prices and inflation fears.