Goldman Sachs and Wells Fargo have cast doubt on Treasury Secretary Scott Bessent's expanded bond buyback plan, saying it will do little to reverse the recent jump in long-term yields. In August 21 research notes, strategists from both banks argued that the buybacks, which the Treasury doubled to at least $4 billion per operation for 10- to 30-year debt, do not address the main sources of long-end volatility and are unlikely to meaningfully reset rate levels. Wells Fargo strategists led by Erik Nelson said lowering long-end yields would require macroeconomic shifts such as slower growth, lower inflation, or fiscal consolidation, while JPMorgan's Maia Crook warned that the interventions belie underlying structural challenges and could raise risk premia. The skepticism comes as the national debt crossed $40 trillion on August 18, the same day the Treasury announced the buyback expansion, and with the 30-year yield having hit a 19-year high of 5.34% the day before. Despite initial relief, long yields rose again by August 20, erasing much of the reaction, and analysts at Societe Generale, Deutsche Bank, and Scotiabank see continued pressure on longer-dated yields. Bessent has insisted he has a 'big toolkit' and may use the Treasury General Account for outright purchases, but critics note the buybacks are negligible against the roughly $32 trillion Treasury market and do not reduce the overall debt load.
Bank of Nova Scotia
Deutsche Bank Aktiengesellschaft
Societe Generale S.A.
Goldman Sachs Group Inc
Wells Fargo & Company
JPMorgan Chase & Co