Scott Bessent is trying to show Wall Street that the Treasury still has tools to calm a bruised bond market. Investors’ answer, so far, is that tools are not the same thing as a cure.
The campaign began before the latest buyback announcement. On July 31, US authorities bought yen for the first time in three decades, a move seen as easing pressure on Japan to sell Treasuries; earlier in the year, Bessent also used surprise “rate checks” in currency markets. Former Treasury official Mark Sobel called him “activist, absolutely,” while others saw an administration increasingly unwilling to let rising long-term yields speak for themselves.1
The fiscal backdrop has only sharpened that anxiety. Treasury Borrowing Advisory Committee minutes released Aug. 5 warned of a $1.45 trillion funding shortfall in fiscal 2027-28 at current auction sizes, while annual interest costs have climbed above $1 trillion. The national debt crossed $40 trillion this week, just five months after passing $39 trillion.2
Bessent’s response was to at least double planned buybacks of outstanding 10- to 30-year securities, from a maximum $2 billion per operation to at least $4 billion, beginning Sept. 9. Treasury framed the step as a liquidity measure for thinly traded, mispriced maturities—not a defense of any specific yield level.3
But the market’s initial relief proved fragile. Long-dated Treasuries rallied after the news, with 30-year yields briefly falling as much as 9 basis points, then gave back part of the move. The Financial Times reported that long-term bonds were sliding again as the intervention failed to soothe investors.4
Bessent insists the numbers understate the administration’s position: “There’s nothing magic about the $40 trillion number,” he said, arguing that growth, tariff revenue and investment incentives can improve the outlook. His critics see a harder constraint. As Zurich Insurance strategist Guy Miller put it, intervention can be potent, “but ultimately, unless you tackle profligate policy, that’s not sustainable indefinitely.”1
That divide is also playing out politically. A widely shared post from Steve Rattner, reposted by AI researcher Yann LeCun, said Trump had promised to cut government debt but had instead overseen debt rising beyond 100% of GDP and toward its World War II-era record.
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