US Treasury Buyback Scale Falls Short of Expectations, Bessent Plays Down Market Concerns

BlockBeats news, September 11 — U.S. Treasury Secretary Bessent downplayed market concerns that Thursday's Treasury buyback operation was smaller than expected, and also minimized worries about a sharp rise in U.S. Treasury yields.

Bessent said the U.S. Treasury market is currently in "very good shape." He highlighted the strong performance of two Treasury auctions held over the past few days. He also reiterated that the recent correlation between bonds and energy prices has been unusually high. Earlier, the two-year U.S. Treasury yield hit its highest level since 2024, and the 10-year U.S. Treasury yield also rose to its highest since 2023. Factors driving this round of selling included surging crude oil prices and the Treasury actually buying back fewer bonds than expected.

The U.S. Treasury had announced on Wednesday plans to buy back up to $6 billion in bonds, but the actual total buyback on Thursday was only $5.19 billion. Bessent pointed out: "We only buy back bonds when prices are cheap," but in this operation, bondholders seemed more willing to continue holding their long-term securities. He said: "Normally we receive $20 billion" in sell offers, while this time the Treasury received only about $10 billion in offers.