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💵📉 Treasury Doubles Bond Buybacks as Bessent Moves to Steady Surging Yields The US Treasury unexpectedly announced Wednesday that it will “at least double” its long-dated debt buybacks, from $2 billion to at least $4 billion per operation, after yields on long-term government bonds surged to their highest levels in nearly two decades. The move, targeting 10- to 30-year debt, sent the 30-year yield down nearly 10 basis points and pushed the dollar sharply lower. Treasury Secretary Scott Bessent has focused heavily on bringing down longer-term yields, particularly the 10-year, which serves as a benchmark for mortgage and other borrowing costs. The announcement came as total US government debt surpassed $40 trillion for the first time. (Reuters) The intervention has also raised questions over the increasingly blurred line between Treasury debt management and monetary policy. Economists warned that attempts to suppress longer-term borrowing costs could complicate the Federal Reserve’s fight against inflation and increase political pressure on the central bank. (Reuters) Real Vision founder Raoul Pal calls Wednesday’s move “the Bessent Put.” Pal argues the government has effectively signaled that it will not tolerate long-term yields climbing much higher, putting a floor under bond prices. The dollars involved are small relative to the enormous Treasury market, he wrote, but “the signal is enormous”: Treasury doubled its long-end support within 24 hours of the 30-year yield reaching 5.33%, its highest level since 2007. (Reuters) Pal ties the move to a broader strategy of weakening the dollar to draw foreign buyers, particularly Japan and eventually China, back into US debt markets, while financing ballooning government borrowing and enormous AI data-center investment. He argues that the AI investment cycle has become increasingly “too big to fail.” Mohamed El-Erian, chief economic adviser at Allianz and former PIMCO CEO, told CNN the move amounted to “financial engineering” to buy time, describing it as a short-term effort undertaken with the approaching midterm elections in mind. ⬇️