Treasury Secretary Scott Bessent told CNBC on Thursday that an accelerated buyback of government debt could be higher than the announced $4 billion.
In a live interview, Bessent said his department is going “make a market” in the longer-dated securities where yields have been surging lately. Treasury announced Wednesday that it would be doubling its scheduled $2 billion in buybacks of longer-dated government debt, sending yields sharply lower.
“We’re going to increase the size of the buyback,” he said. “I would note that it could be more than the 4 billion per issue.”
The remarks caused a bit of easing in yields, though they had largely reversed the decline following Wednesday’s announcement. The 30-year bond most recently was trading around 5.235%. The so-called long bond recently had been trading at levels not seen since prior to the global financial crisis in 2008.
Bessent acknowledged the pressure at the farther reaches of the curve, saying that the current trading levels didn’t reflect current economic conditions.
“We have a big toolkit, so we’ll see,” he said. “Part of it is signaling here and to show that we believe that the yields don’t reflect the underlying fundamentals.”
He also characterized liquidity for the 30-year bond as “very poor,” providing another incentive for Treasury to intervene in what normally is a robust market.
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