Treasury rout restarts after Bessent’s buyback plan fails to calm bond market

Treasury Secretary Scott Bessent tried to put out a fire in the bond market this week. The fire said no thanks. On August 19, Bessent announced a significant expansion of Treasury buyback operations targeting longer-dated nominal coupon securities in the 10- to 30-year sector. The per-operation cap jumped from $2 billion to at least $4 billion, with the expanded program set to run from September 9 through November 4. The initial market reaction looked promising. The 30-year yield dropped roughly 10 basis points to around 5.19%. By August 20, though, yields had rebounded and nearly erased the entire move. Why the Treasury stepped in The backdrop here is genuinely alarming. Total US public debt crossed the $40 trillion mark in mid-August 2026, a psychological threshold that makes deficit hawks and bond vigilantes equally uncomfortable. Before Bessent’s announcement, the 30-year Treasury yield had climbed to its highest level since 2007. The sell-off in long-term Treasuries had been accelerating, driven by fiscal deficit concerns and geopolitical tensions. Bessent, who had previously coordinated with Japan on currency market stabilization earlier in his tenure, opted for direct market...