The US Treasury announced it will purchase up to $6 billion in longer-dated government bonds on Thursday, marking the first operation under Treasury Secretary Scott Bessent's expanded buyback program aimed at curbing recent increases in borrowing costs. This maximum size is triple the $2 billion initially communicated to investors in early August. The original plan was abandoned in a surprise announcement on August 19, when the Treasury stated it would "at least double" the scale of such operations.

The 20-to-30-year Treasuries targeted in Thursday's repurchase extended their declines on Wednesday following the announcement. The 30-year yield hit an intraday high of 5.38%, before touching the nearly 5.40% peak seen earlier this month, which was the highest level since 2007. Since the outbreak of war between the US and Iran in late February, rising energy costs have driven global bond yields higher, which has also shifted the outlook for Federal Reserve monetary policy — Chair Kevin Warsh raised the overnight rate last week for the first time since 2023 to help contain price pressures.

Facing criticism that the move amounts to intervention and does not address the fundamental fiscal challenges, Bessent defended his decision to expand the buyback scale. He stated on Monday that he acted after concluding the market had "deviated" from equilibrium pricing. He claimed that from the August 19 announcement through September 21, the 30-year Treasury yield had risen only about 1 basis point.

The Institute of International Finance warned early Wednesday that one of the world's largest financial industry associations cautioned that attempts at "financial engineering" would not resolve the underlying debt dynamics. In a report, the Institute of International Finance stated that interventions such as purchasing securities in the secondary market "may provide temporary relief but cannot address the structural drivers of rising debt."

Following the previous expanded buyback announcement on September 9, when the Treasury declared a maximum size of $6 billion, bonds subsequently declined. Although this was triple the originally announced $2 billion, some market participants had anticipated a larger scale given the Treasury's theoretically uncapped guidance of "at least doubling." Ultimately, the Treasury did not utilize the full maximum amount, purchasing only about $5.2 billion in 10-to-20-year notes. According to officials, this reflected a lack of competitive bidding, with investors offering $10.5 billion in bonds during that operation.