TREASURY: Doubles Bond Buybacks to $4 Billion to Calm Market Chaos

The US Department of the Treasury announced it will at least double the maximum size of its liquidity support buyback operations for longer-dated nominal coupon securities to at least $4 billion per operation. The increase applies to the 10- to 30-year sectors and takes effect from September 9 through November 4. Officials said the step is designed to deliver greater liquidity support in areas of the market showing strong demand. The decision follows a sharp bond selloff that drove 30-year yields to their highest levels since 2007.

That selloff was fueled by mounting fiscal concerns and ongoing geopolitical risks, putting heavy pressure on the long end of the yield curve. By expanding the buyback program, the Treasury aims to stabilize conditions and improve market functioning for these longer-maturity securities. The previous maximum of $2 billion per operation will now rise to at least $4 billion, giving the department more firepower to absorb supply when needed. Market participants had been watching closely for any signal of additional support.

Investors reacted quickly and positively to the news. Long-end Treasury yields fell sharply as the announcement eased some of the recent strain. The dollar weakened while gold prices moved higher, reflecting a broader shift in risk sentiment. Traders interpreted the larger buybacks as a clear effort to reduce volatility and restore confidence in the longer-dated bond market.

The expanded operations underscore the Treasury’s readiness to step in when liquidity conditions tighten. With fiscal worries and global uncertainties still present, the temporary increase provides a buffer through early November. Analysts will now monitor how effectively the larger buybacks translate into sustained stability across the yield curve. The move marks one of the more notable adjustments to the Treasury’s liquidity toolkit in recent months.