U.S. Treasury Secretary Scott Vessenet indicated that the government's Treasury buyback program could exceed the previously announced $4 billion, aiming to stabilize the bond market. However, U.S. Treasury yields have resumed their upward trend amid ongoing market concerns.
In an interview with CNBC on the 20th, Vessenet stated that the Treasury would "create a market" for long-term bonds, which have seen a sharp rise in interest rates, adding, "We will increase the buyback size." He noted that this amount could surpass $4 billion in a single instance.
This statement came just a day after the Treasury announced plans to raise the buyback size from a minimum of $2 billion to at least $4 billion, suggesting that it could potentially exceed $4 billion again.
Vessenet also mentioned that the buyback size could increase further, but specific figures would depend on market conditions. He explained, "What we want to do is ensure that people focus on fundamentals and do not trade based on news headlines in a thin and quiet market."
Recently, U.S. Treasury yields have surged due to a combination of factors, including a rapid increase in government debt and deficits, a surge in corporate bond issuance related to artificial intelligence (AI), and rising yields on government bonds in other countries like Japan. Notably, the U.S. national debt has surpassed $40 trillion for the first time, raising concerns.
On the previous day, the yield on 30-year Treasury bonds rose to 5.337%, marking the highest level in 19 years since 2007.
Regarding the $40 trillion national debt, Vessenet stated, "There is no magical significance to the number $40 trillion; we can overcome this issue through economic growth." He emphasized that the message he wants to convey to allies and trading partners is that global growth is a way to address this enormous debt problem.
Meanwhile, despite the announcement of the Treasury buyback program, which had previously led to a decline in Treasury yields, the yields returned to an upward trend following Vessenet's comments about expanding the buyback size. As a result, the yields on both 10-year and 30-year Treasury bonds rose by 0.05 percentage points, reaching 4.704% and 5.248%, respectively.
* This article has been translated by AI.
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