Treasury Secretary Scott Bessent announced on August 19, 2026, that the Treasury Department will at least double the size of its government debt buyback operations to address rising borrowing costs. The maximum size of buyback operations for longer-dated nominal coupon securities will increase from $2 billion to at least $4 billion per operation, focusing on the 10-year to 20-year and 20-year to 30-year sectors.
Treasury yields have risen, with yields on 10-year, 20-year, and 30-year treasury notes reaching their highest levels in years, including a peak for the 30-year Treasury yield not seen since 2007 before it declined following the announcement. The Treasury stated that the increase in buyback operation sizes aims to provide greater liquidity support in longer-dated nominal sectors, where there is strong demand from market participants.
The bond market is under pressure as the national debt approaches $40 trillion, with net interest payments consuming a growing share of federal revenues. Factors contributing to this pressure include the war in Iran, increased competition for financing from companies investing in AI infrastructure, and widening federal budget deficits. The announcement follows a recent joint intervention by the Treasury and Japan to support the yen, which had weakened significantly against the dollar. Despite inflation and rising borrowing costs, the U.S. stock market has shown resilience, with the S&P 500 reaching a record high last week, although overall market volatility persists.