U.S. Treasury Secretary Bessent said the Treasury’s expanded buybacks of older 10- to 20-year Treasuries are meant to steady long-term yields and cool what he described as “frenzy” in the bond market, not to restart quantitative easing. Speaking at a Breitbart News event in Washington, he framed the move as a maturity-structure adjustment similar to “Operation Twist” and rejected the idea that the action reflects credit concerns.
Market expectations for the current round of buybacks start at no less than $4 billion. If the operation comes in closer to $10 billion, market participants see that as a possible benchmark for future operations and one that could push down long-end yields. Morgan Stanley said $10 billion is close to the current operational ceiling, while Wrightson ICAP called $5 billion to $6 billion a reasonable starting point.
Bessent also commented on yen intervention, saying he is “the house” and would use an informational edge against traders shorting the Japanese currency. Separately, Bloomberg reported that the Bank of Japan is currently inclined to raise its benchmark rate by 25 basis points on Sept. 18, a policy shift that could support the yen.
U.S. Treasury Secretary Bessent said the Treasury’s expanded buybacks of older 10- to 20-year Treasuries are intended to steady long-term yields and correct what he called “frenzy” in the bond market, not to carry out quantitative easing.
Bessent made the remarks while attending a Breitbart News event in Washington.
Market looks for at least $4 billion in the current operation
The market expects the current round of buybacks to total no less than $4 billion. If the size approaches $10 billion, that could set a new benchmark for later operations and may push down long-end yields.
Morgan Stanley said $10 billion is close to the current upper limit for such operations. Wrightson ICAP said $5 billion to $6 billion would be a reasonable starting point.
Bessent compares the move to Operation Twist
Bessent said the buybacks amount to a maturity-structure adjustment similar to “Operation Twist,” and denied that the step is driven by credit worries.
Bessent talks tough on yen shorts as BOJ rate move comes into focus
On yen intervention, Bessent said he is “the house” and would use an information advantage against traders betting against the yen.
According to Bloomberg, the Bank of Japan is currently inclined to raise its benchmark rate by 25 basis points on Sept. 18. That policy change could help strengthen the yen.
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