CNBC reported that the US Treasury could use its roughly $1 trillion Treasury General Account to expand buybacks of long-term bonds. After the Treasury recently announced plans to double buybacks aimed at supporting the long end of the market, investors saw the move as having only short-term impact, and Treasury prices briefly recovered to pre-announcement levels. Asked at a press conference on the 24th about the possibility of larger bond purchases, Treasury Secretary Scott Bessent said only that the Treasury has not yet bought and that we will see what happens at the next purchase on September 9. With the view that the Treasury has a powerful ability to push long-term yields lower further, Treasuries rebounded on the 24th, and the dollar remained soft as long-term yields fell, trading below its key 200-day moving average. The possibility of Treasury intervention may cap dollar upside for now.
Treasury may expand bond buybacks, pushing long-term yields lower.
