At the same time, U.S. Treasury Secretary Scott Bessent has recently announced the largest Treasury buyback in U.S. history—$10 billion. This unprecedented move comes as a stabilizing force to an increasingly disorderly bond market after weeks of turbulence. This bold move follows a total lack of action by Federal Reserve Chair Jerome Powell to calm the markets’ fears. Bessent seems to be going out of his way to assuage investor concerns. That’s on the heels of another bond sell-off, sparked by former President Donald Trump’s “Liberation Day” on April 14.
On that day, the corporate bond market experienced a historic flight to liquidity. This led to a massive dollar fire sale that sent shockwaves through financial markets from Tokyo to Frankfurt. To meet that demand, Bessent is turbocharging Treasury buybacks — a process that started earlier in April with much smaller buybacks. These buybacks target Treasuries maturing between July 2025 and May 2027. This highly technical strategy paves the way for future round operations, specifically targeting longer-dated securities that mature from 2036 to 2045.
This last buyback, Bessent has said, is critical and has featured prominently in his ongoing public communication battle with Powell. He mentioned having weekly breakfasts with the Fed Chair, where they discuss the state of the economy and monetary policy. Despite these discussions, Bessent has indicated that the Treasury will utilize its toolkit if the Fed fails to act in a timely manner to address market instability.
The Treasury’s recent actions are a clear response to the Fed’s inaction amid growing market pressures. The new round of buybacks will raise the operational ceiling to $2 billion. This is a huge amount, doubling the previous May cap of $1 billion. This change to the theme amplifies the timeliness of the topic. We need to make big moves to regain the confidence of the investor community.
Scott Bessent’s strategy represents an important break from how the Treasury has stabilized markets in the past. To offset the recent selling waves, he carries out massive buybacks on a grand scale. This strategy provides additional debt service relief and puts the bond market on a longer-term stable footing by providing more predictable bond issuance. The Treasury is right to take bold measures to defend the U.S. economy. They’re dedicated to maintaining that resiliency in the face of rising external pressures.