Bessent's Treasury Buyback: Is There Another Real Purpose? | Park Jun-woo, Hana Securities Research Center Research Fellow

Summary

Park Jun-woo explains the real mechanics and purpose of the US Treasury buyback program, arguing it is part of a sustained, escalatable effort to stabilize long-end yields rather than a sudden QE. He outlines how policy-induced yield suppression would create inflation, dollar weakness, and support gold and bitcoin. He also contends that rising US and Korean rates currently reflect growth, supporting equities and semiconductor/big-tech earnings, while the main risk is much more aggressive Fed tightening.

• Explains Treasury buyback, FIMA repo, and coupon issuance as tools to reduce long-end yield pressure and absorb illiquid long-dated bonds.
• Argues current Treasury measures are deliberately weak but can escalate if 30-year yields rise too far.
• Cites historical 1940s YCC and bank regulation/QE as stronger tools the government could use.
• Expects that sustained yield suppression or liquidity expansion would weaken the dollar and benefit gold and bitcoin.
• Interprets rising US and Korean interest rates as a growth signal rather than an imminent recession warning.
• Says strong growth and earnings support equities and semiconductor/big-tech earnings unless the Fed hikes too aggressively.
• Views Treasury yield-management policy as likely to continue regardless of midterm election outcomes.