Treasury Secretary Continues Auction Schedule Amid Expanded Buyback Program

Treasury Secretary Scott Bessent confirmed on Monday that regularly scheduled Treasury auctions will continue as planned, despite the recent expansion of the buyback program for longer‑dated securities.

During a press conference, Bessent addressed various topics, including a new strategy to pressure Iran’s economy through secondary sanctions, and clarified that the Treasury’s auction schedule remains unchanged. When asked whether the department might scale back longer‑term debt auctions to influence yields, he said:

“We are going to continue with our regular program of auctions. So you will be hearing from us again at the beginning of next quarter,” Bessent stated. He added, “We haven’t bought a single bond yet.”

TREASURY YIELDS HIT MULTI‑DECADE HIGHS AMID SURGING NATIONAL DEBT

Treasury Secretary Scott Bessent said auctions of Treasurys will continue as scheduled despite the larger buybacks on longer‑dated securities. (Krisanne Johnson/Bloomberg via Getty Images)

Bessent noted that the next auctions for longer‑dated Treasurys—such as the 10‑year note and the 20‑ and 30‑year bonds—are not scheduled until mid‑September, which is the earliest the new buyback structure could be applied after the change takes effect on Sept. 9.

Under the change, announced on Aug. 19, the Treasury’s maximum buyback authority rises from $2 billion per operation to at least $4 billion per operation. The new level serves as a floor rather than a cap, allowing buybacks to adjust to market conditions.

The policy is expected to remain in effect through the remainder of the quarter, or until Nov. 4, at which point the Treasury will provide additional guidance on future buyback sizes.

The Treasury explained that the increased buyback operations are intended to “provide greater liquidity support in longer‑dated nominal sectors where there is consistent strong sponsorship from market participants, as evidenced by the significant volume of high‑quality offers Treasury routinely receives in longer‑dated buyback operations.”

U.S. NATIONAL DEBT HITS $40 TRILLION MILESTONE FOR FIRST TIME EVER

Yields on Treasurys are near multi‑year highs amid the rise in the U.S. national debt and geopolitical uncertainty. (Mandel Ngan/AFP via Getty Images)

Last week’s announcement temporarily lowered yields on the 10‑year Treasury note and on 20‑ and 30‑year bonds, though the declines were largely reclaimed by the end of the week. Yields edged down modestly on Monday.

Bessent indicated that higher buybacks are aimed at bolstering liquidity in a thinly traded segment of the market, especially the 30‑year sector, while longer‑dated Treasurys face competition from heavy corporate bond issuance tied to the artificial‑intelligence boom.

Rising Treasury yields increase fiscal pressure on the federal government, which must pay higher interest to service the growing national debt. The development coincides with the U.S. gross national debt surpassing $40 trillion for the first time.

BESSENT OUTLINES FIVE PRINCIPLES GUIDING THE TRUMP ADMINISTRATION’S ECONOMIC STATECRAFT

The Treasury’s buyback initiative does not specify a funding source. According to a Reuters report, the Treasury General Account (TGA) at the Federal Reserve could be used, as doing so would avoid issuing additional short‑dated Treasurys—though it would draw down the nation’s cash reserves.

The TGA functions as the federal government’s checking account, financing daily operations such as federal payroll, contracts, and Treasury obligations. As of last Wednesday, the TGA held roughly $940 billion.

Treasury has expanded the TGA this year partly to cover some of the $166 billion in tariff refunds owed to importers following a Supreme Court decision that invalidated a key portion of President Donald Trump’s tariff policy.

Historically, the TGA has averaged about $840 billion over the past year, the highest level outside the pandemic‑era surge.

Reuters contributed to this report.

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