Treasury Secretary Bessent Boosts Buybacks of Long-Dated Debt

Summary

The Treasury announced it will at least double the maximum size of its liquidity support buyback operations for longer-dated nominal coupon securities to at least $4 billion per operation, effective September 9, 2026. The move targets the 20-30 year sector and aims to improve liquidity and support long-end Treasury prices. Michael McKee frames the announcement as a first step of corrective action to cap the long end after recent rate pressure.

• Treasury doubles liquidity support buybacks for longer-dated nominal coupons to at least $4 billion per operation.
• The change applies to the 20-30 year Treasury sector and is effective September 9, 2026.
• More buyback details are expected at the November 4, 2026 quarterly refunding.
• The announcement moved the long end, with the 10-year Treasury yield down close to six basis points.
• Michael McKee says buybacks can shift demand into on-the-run issues, raising prices and lowering yields.
• He interprets the step as an early corrective action to put a lid on the long end of the curve.