Bessent’s Treasury Buyback Push Loses Steam in Two Days as US Debt Tops $40 Trillion

Forecast Trend Report by Period

Treasury yields resume climb despite expanded buybacks

Investor confidence weakens as debt surpasses $40 trillion

Treasury Secretary Scott Bessent tried to rein in surging US government bond yields by expanding Treasury buybacks, but the effect did not last two days. With total US government debt now above $40 trillion, investors are signaling that short-term steps alone will not be enough to calm the bond market.

The Wall Street Journal reported on Aug. 22 that selling in Treasuries briefly eased after the Treasury Department announced a plan to expand buybacks. Yields soon turned higher again. The newspaper called it “a bruising week in which Scott Bessent was schooled by the bond market.”

The yield on the 30-year Treasury had climbed to 5.31% on Aug. 17, the highest level since June 2007. Higher Treasury yields mean lower bond prices.

The Treasury announced on Aug. 19 that it would at least double long-dated Treasury buybacks. The move would increase purchases of off-the-run securities to at least $4 billion from $2 billion. Investors viewed it as an attempt to keep market rates from rising further and lower borrowing costs across the economy.

The plan initially appeared to gain traction. Some investors who had bet on further increases in long-term yields rushed to unwind those positions, briefly pushing yields lower.