US Treasury Secretary Scott Bessent said increased buybacks of Treasury securities announced this week could be more than $4 billion per issue.
“We have a big toolkit, so we’ll see,” Bessent said Thursday on CNBC. “And part of it is signaling here, and to show that we believe that the yields don’t reflect the underlying fundamentals.”
Bessent spoke after the Treasury Department said Wednesday that it would increase “by at least double” the size of buybacks for longer-dated securities. The impact in the market was short-lived, with US 30-year bonds erasing gains from the surprise announcement by Thursday. Yields on 10-year and 30-year securities remained higher following his comments.
“All we’re trying to do is get people to focus on the fundamentals and not trade the headlines during a quiet period in a thin market,” Bessent said. “So we are trying to keep the market in equilibrium.”
Wide fiscal deficits remain a top concern for investors, along with inflation worries amid the war in Iran and supply pressure from a surge in borrowing in the artificial intelligence industry. The climb in US Treasury yields has increased the cost of servicing the national debt, which hit a record $40 trillion this week.
The Trump administration is planning to announce “this week, or beginning of next week” an “increased focus on fiscal consolidation,” Bessent said, and that the government is looking at both revenues and costs.
When asked if this administration has reached a peak for the deficit, Bessent said there is a “very good chance we have,” adding that the government could save “several hundred billion dollars.”
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