US Treasury will maintain regular debt auctions as bond buybacks expand

The US Treasury will continue its regular debt auctions, including long-dated bonds, even as it expands buybacks of 10- to 30-year securities, Secretary Scott Bessent said Monday.

Bessent said the department has not yet purchased bonds under the larger program. The expanded buybacks are scheduled to begin Sept. 10 for 10- and 20-year securities, according to Reuters.

The Treasury’s decision to increase quarterly repurchases briefly pushed down yields on 10-year Treasury notes and 20- and 30-year bonds. Those yields later recovered much of the decline as investors continued to assess the effect of high borrowing costs on federal debt-service expenses.

The Treasury has not disclosed how it will fund the buybacks. Drawing from its account at the Federal Reserve would reduce the government’s cash reserves, while new borrowing would need to use shorter maturities to preserve the buybacks’ goal of improving liquidity in longer-dated bonds.

Bessent also warned countries to cut business ties with Iran or face possible secondary sanctions. He said a major sanctions announcement related to a bank would come later this week.