Bessent Says Treasury Buyback Expansion Aimed at Cooling Overheated Market

U.S. Treasury Secretary Scott Bessent said that the expansion of U.S. Treasury buybacks announced last August is intended to cool down an overheated bond market.

According to Bloomberg reports, Secretary Bessent attended an event in Washington, D.C. on the 8th (local time) and stated during a Q&A session, "My job is to push the market back toward balance," adding, "I don't think I can change the equilibrium price, but there is no such thing as a perfect equilibrium in the world."

This remark came a day before the Treasury's first purchase following its announcement to expand long-term Treasury buybacks.

Previously, the yield on 30-year U.S. Treasuries had surged to its highest level since 2007.

Hinting at his background as a hedge fund manager, Secretary Bessent said, "Heat was building up in the market," and added, "When you speculate in financial markets, you want to accelerate the situation further."

He also dismissed the view that the rise in U.S. Treasury yields was due to concerns over the size of the U.S. federal debt, asserting, "If everyone worried about U.S. credit, they would have sold U.S. Treasuries and bought German bonds, but it's the exact opposite. We are performing the best."

He also refuted criticism that the Treasury's bond buybacks are a form of "quantitative easing (QE)," a bond-buying program frequently used by the Federal Reserve to stimulate the economy.

Secretary Bessent stated, "I am not doing quantitative easing," adding, "It is closer to a Treasury version of Operation Twist, where the Fed in the past sold short-term Treasuries and used the proceeds to buy long-term Treasuries."

The U.S. Treasury is scheduled to announce its purchase size for 10- to 20-year Treasuries on the 9th.

This follows the first official announcement after shocking the market last month by declaring plans to "at least double" the buyback size of 2 billion dollars.

While Secretary Bessent has kept the exact size under wraps, the market expects it to exceed 4 billion dollars.
 
(Photo: Getty Images)
※ Please note: This article was translated by AI and may contain errors.