Treasury Secretary Scott Bessent told CNBC on Thursday that the acceleration in bond purchases could exceed the announced $4 billion.
Mr. Bessent said in a live interview that the unit intends to “build a market” in long-term securities, where yields have recently surged. The Treasury Department announced on Wednesday that it would double its long-term bond buybacks to a planned $2 billion, sending yields sharply lower.
“We intend to expand the scale of our stock buybacks,” he said. “Please note that it can exceed 4 billion per issue.”
The remarks caused only a temporary easing in yields, nearly reversing the decline that followed Wednesday’s announcement. The most recent 30-year bond was trading around 5.235%. So-called long-term bonds have recently been trading at levels not seen since before the 2008 global financial crisis.
Bessent said share buybacks could increase, but declined to provide numbers, saying it would depend on market conditions.
“We will see what the situation is and analyze it,” he said. “All we’re trying to do is get people to focus on the fundamentals and not trade headlines during quiet periods when the market is thin.”
Bessent said current trading levels do not reflect current economic conditions and acknowledged pressure on the far end of the curve.
“We have a big toolkit, so we’ll see,” he said. “Part of that is the signal here, to show that we believe yields are not reflecting underlying fundamentals.”
He also characterized the liquidity of the 30-year bond as “very thin,” giving the Treasury new incentive to intervene in a normally robust market.
A combination of factors are driving yields higher. Soaring U.S. debt and deficits. Competition from other areas, such as corporate bond issuance related to artificial intelligence, high yields by other sovereign nations such as Japan, and term premiums, the additional yield that investors demand for holding government debt.
On the fiscal front, Bessent said he plans to meet with Office of Management and Budget Secretary Russell Vought to discuss “fiscal consolidation.” The national debt surpassed the $40 trillion mark this week, according to figures released by the Treasury Department on Wednesday.
“There’s nothing magical about the 40 trillion number, and we can grow our way out of it,” Bessent said.
“Our message to our allies and trading partners is that global growth is the way to deal with this huge debt,” he added.
This is breaking news. Please refresh to check for updates.
