The US Treasury, led by Secretary Scott Bessent, is doubling its buyback program for long-dated securities to address liquidity issues in the bond market. The maximum size of these operations will increase from $2 billion to at least $4 billion per transaction.
The expanded program covers the 10- to 20-year and 20- to 30-year sectors. These changes are scheduled to take effect on September 9 and will remain in place through November 4, 2026. This initiative adds an estimated $14 billion in buybacks to the previously planned $69 billion for the current quarter.
The decision follows a surge in 30-year Treasury yields to 19-year highs, a trend attributed to thin summer trading and heavy corporate bond issuance related to AI infrastructure. The Treasury General Account currently holds approximately $950 billion, providing capacity for further adjustments if market conditions require.
Secretary Bessent framed the expansion as a measure to enhance market liquidity rather than a direct attempt to suppress yields. The program specifically targets off-the-run Treasuries, which often face trading constraints. Following the announcement, 30-year yields initially dropped by 9 basis points.
