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US Treasury to Buy Back $6 Billion in Longer-Dated Debt to Stem Rising Borrowing Costs
M
Moneycontrol•23-09-2026, 22:37
US Treasury to Buy Back $6 Billion in Longer-Dated Debt to Stem Rising Borrowing Costs
- •The US Treasury will purchase up to $6 billion in longer-dated government debt on Thursday, tripling the initial August plan of $2 billion.
- •This operation is part of Secretary Scott Bessent’s expanded program aimed at curbing the recent increase in borrowing costs.
- •Treasuries maturing in 20-to-30 years are the target for the buybacks, with the 30-year yield recently hitting near 5.40%, its highest since 2007.
- •Bond yields have surged globally due to higher energy costs following the US’s war with Iran, leading Federal Reserve Chairman Kevin Warsh to raise interest rates.
- •Despite criticism, Bessent defended the upsized buybacks, stating he acted when markets were —moving away— from equilibrium prices, while the IIF warned against —financial engineering— without addressing underlying debt dynamics.
Key Questions Answered
The US Treasury announced plans to purchase up to $6 billion in longer-dated government debt under Treasury Secretary Scott Bessent's expanded program, which is triple the initial $2 billion amount communicated in early August.
Treasury Secretary Scott Bessent defended the expanded buybacks as an effort to moderate rising borrowing costs, calm a building market 'fever', and help steer prices back toward equilibrium after long-term yields hit their highest levels since 2007.
The Institute of International Finance warned that such 'financial engineering' and secondary market interventions provide only temporary relief and fail to address the underlying structural drivers of rising US debt.
