The U.S. Treasury doubled its long-term bond buyback program on Wednesday, escalating efforts to stabilize a market sounding alarm as yields surged to their highest levels in nearly two decades amid geopolitical tensions and fiscal concerns. Treasury Secretary Scott Bessent announced that the government will increase the maximum size of its buyback operations from $2 billion to at least $4 billion per operation, focusing on 10- to 30-year Treasury debt securities beginning September 9 through November 4.
The move came a day after the 30-year Treasury yield hit 5.34%, its highest level since 2007, as a bond selloff gripped global markets. The 10-year yield, the benchmark for mortgage rates, also climbed sharply, reflecting investor concerns over rising inflation expectations, deteriorating U.S. fiscal conditions, and escalating tensions with Iran that have unsettled financial markets worldwide.
Treasury’s announcement immediately moved markets. The 30-year yield fell 9 basis points to 5.196%, and the 10-year dropped 5.7 basis points to 4.647%, as traders and investors reacted to the signal that the government was willing to deploy larger tools to ease market stress. Stock market futures also surged following the announcement.
The buyback program itself is not new. Treasury launched the liquidity support initiative in May 2024 to strengthen market functioning by providing a regular and predictable mechanism for investors to sell older, off-the-run securities before their maturity dates. The program had previously been expanded in 2025, when Treasury repurchased a record $10 billion in a single operation and increased quarterly limits to $38 billion across all maturities. The latest doubling of per-operation sizes signals an acceleration of that effort.
The increase will add at least $14 billion in additional buyback capacity during the current quarter, according to Reuters. While economists and market analysts noted this is modest relative to the $32.2 trillion Treasury debt market, they viewed it as a significant tactical move. Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said the buyback operation “can help crowd in potential buyers tempted by the prior run-up in yields and force some near-term short-covering, while discouraging investors from going max short in the future for fear of being ambushed again.”
However, experts cautioned that the buyback addresses a symptom rather than the underlying disease. Bessent’s move came as total public debt crossed the $40 trillion mark on Wednesday. Mohamed El-Erian, a prominent economist, noted on X that the planned purchases are “small in both absolute terms and relative to net issuance” and represent a broader deployment of yield curve control. Evercore analysts added that the operation “changes almost nothing in terms of the fundamentals—in particular the unchanged need to finance the tidal wave of hyperscaler debt in addition to very large government deficits.”
The bond market’s distress reflects multiple pressures converging on U.S. government debt. Rising term premiums—the extra yield investors demand to hold longer-duration bonds—have widened. The composition of Treasury buyers has shifted, with traditional foreign holders reducing exposure. Corporate debt supply has swelled, particularly from artificial intelligence companies raising capital. And geopolitical uncertainty over the U.S.-Iran conflict has driven risk-off positioning globally.
Thomas Simons, chief U.S. economist at Jefferies, said the surprise buyback announcement upends Treasury’s tradition of consistent, predictable communications about debt issuance, adding the move feels “shot from the hip.” Still, Anshul Sharma, chief investment officer at Savvy Wealth, argued the intervention signals resolve: “This doesn’t solve the underlying issues around deficits, inflation, or Treasury supply. But it buys some time and, perhaps more importantly, signals that Treasury has tools available and is willing to use them when market conditions warrant.”
The buyback expansion will remain in effect through the Treasury’s next quarterly refunding announcement, scheduled for November 4. Whether the doubled capacity proves sufficient to temper bond market volatility—or whether it merely delays a reckoning with America’s fiscal trajectory—remains an open question for investors and policymakers alike.
Sources
- CNBC — Treasury’s announcement to double buyback sizes from $2 billion to at least $4 billion per operation; expert commentary from Krishna Guha and Joe Brusuelas on the move’s implications
- Reuters — Treasury’s decision to double buyback sizes for 10- to 30-year debt; context on the 30-year yield hitting 19-year high; details on the $14 billion increase in current quarter capacity; commentary from Dan Gottlander, Rene Albrecht, and Evercore ISI analysts
- Wall Street Journal — Bond market pressures and yield spike on August 17 amid Iran tensions
- IMF Working Paper (2025) — Background on Treasury’s liquidity support buyback program launched in May 2024
