U.S. Treasury Secretary Scott Bessent pushed back on criticism of the department’s expanded bond buyback program, arguing it reduces volatility rather than distorting prices as 30-year borrowing costs reached the highest level in 19 years.
Speaking in Asheville, North Carolina, on Sunday, Bessent said he was unaware of any bond market turmoil and noted that U.S. Treasuries had been the best-performing sovereign debt globally this year. Benchmark 10-year yields ended Friday near 4.73%, little changed over the past week despite geopolitical tensions and thin summer trading volumes.
The Treasury announced last week it would at least double the size of buybacks of longer-dated debt to $4 billion per operation, starting September 10. The move follows complaints from some central bank officials who argued the program could disrupt standard market operations. Bessent countered that the initiative is designed to stabilize markets during periods of heightened volatility, such as August, rather than influence equilibrium pricing.
Bessent attributed the rise in yields to energy prices and inflationary pressures linked to recent conflicts involving Iran, though he expects these pressures to ease over time. He also dismissed comparisons to past interventions by other central banks, stating that markets accepted similar actions by the European Central Bank and Bank of Japan without concern.
The remarks came ahead of a two-day Group of 20 finance leaders’ meeting in Asheville, where global debt dynamics and market stability are expected to feature prominently on the agenda.
