The U.S. Treasury is poised to deploy a $950 billion cash balance to accelerate a surge in long-dated bond buybacks, a strategy Treasury Secretary Scott Bessent framed as a ‘Treasury Twist’ to signal confidence in the market’s underlying fundamentals amid geopolitical tensions.
The Treasury’s General Account, now holding roughly $950 billion—well above the $550–$600 billion target maintained under the prior administration—will underpin operations scheduled from September 9 through November 4. The per-operation cap has been doubled to at least $4 billion, with Bessent indicating buybacks could exceed that threshold per issue.
The announcement follows a 19-year high in the 30-year Treasury yield, which reached 5.337% on August 19 amid disruptions in the Strait of Hormuz linked to Persian Gulf tensions. Yields retreated after the buyback plan was unveiled, with the 30-year easing to 5.196% ahead of Monday’s market open, while the 10-year yield fell to 4.651%.
Analysts offered mixed assessments of the initiative. Krishna Guha of Evercore ISI characterized the plan as a ‘weak form Operation Twist’ that may have limited long-term impact and risked signaling funding concerns if perceived as a sign of distress. George Saravelos of Deutsche Bank described the buybacks as ‘soft-form financial repression,’ warning of potential dollar depreciation as foreign investors adjust holdings.
ING analysts noted the intervention was ‘warmly greeted by investors globally,’ but cautioned that structural fiscal consolidation would be required for a sustainable recovery in bond markets. Bessent, in a CNBC interview on August 21, emphasized the Treasury’s broader toolkit and stated that buybacks ‘could be more than $4 billion per issue.’
The Treasury’s move comes as part of a broader effort to stabilize long-end yields, with Bessent scheduled to outline a new Iran sanctions plan during a press conference at 2:00 PM ET on Monday.
