US Treasury Secretary Scott Bessent announced on August 19 a significant expansion of the government’s bond buyback program, doubling the per-operation cap on longer-dated securities from $2 billion to $4 billion. The operations will run from September 9 through November 4, a timeline that precedes midterm elections. The 30-year Treasury yield had climbed to approximately 5.3%, a near two-decade high, briefly dipping to 5.18% after the announcement before reversing course. This initiative has created a fundamental philosophical rift with Federal Reserve Chair Kevin Warsh, who favors letting markets find their own level, while Bessent’s strategy echoes the 1960s « Operation Twist ». Markets remain skeptical: these buybacks, despite being doubled, represent a modest intervention against the massive Treasury issuance needed to finance federal deficits, with the national debt standing above $40 trillion.
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