Former New York Fed President Bill Dudley criticized the US Treasury’s decision to ramp up buybacks of long-dated government debt, viewing it as a departure from its traditional commitment to predictable issuance. This intervention came after the 30-year Treasury yield exceeded 5.3% in August, its highest level since 2007. Treasury Secretary Scott Bessent announced an expansion of the buyback program to over $4 billion, roughly double its previous size. Dudley also warned about elevated equity valuations, citing a Shiller CAPE ratio near 41 (historical average of 17) and a Buffett Indicator around 240% of GDP, characterizing the current environment as potentially bubble-like.
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