U.S. Treasury Secretary Scott Bessent stated on Tuesday that the Treasury Department's decision last month to expand its buyback program for older-dated notes was primarily aimed at cooling the recent feverish bond market and pushing conditions back toward equilibrium. He also pushed back against the notion that the recent selloff in Treasuries stems from investor concerns over the nation's debt burden, while firmly rejecting any characterization of the operation as quantitative easing (QE).
Speaking at an event in Washington, Bessent said his role is to work toward steering the market back into balance, though he acknowledged the Treasury cannot change the fundamental equilibrium price of assets. "My job is to try and nudge the market back to equilibrium," Bessent remarked. "I don't think I can change the equilibrium price, but markets are never in equilibrium all the time."
His comments arrive as the Treasury gears up for its first buyback operation under the expanded program for longer-dated securities on Wednesday. The announcement of the expanded repurchase effort last month followed a surge in 30-year Treasury yields to their highest level since 2007, which exerted significant selling pressure on long-dated debt. Bessent described the market environment at the time as taking on a "feverish" quality.
Drawing on his extensive experience as a hedge fund executive, Bessent noted that when market participants engage in speculative activity, they typically seek to accelerate price moves. One of the objectives of the expanded buyback program is to help restore balance in such conditions. Treasury buybacks involve the department purchasing already-issued securities in the secondary market, with this program focusing primarily on less liquid, older-dated issues to enhance market functioning and liquidity, rather than altering the overall size of government debt.
Bessent also disputed the narrative that the recent Treasury selloff was primarily driven by investor anxiety over the government's escalating borrowing needs. He argued that if the market genuinely harbored concerns about U.S. creditworthiness, investors would theoretically dump Treasuries and pivot toward German bunds—but actual market behavior suggests otherwise. "If everyone is worried about U.S. credit, you would sell Treasuries and buy German bunds," Bessent said, noting that Treasury performance has actually been relatively stronger.
Furthermore, Bessent explicitly rejected the idea that expanding the Treasury buyback program equates to a form of QE. Quantitative easing, typically implemented by the Federal Reserve, involves large-scale purchases of securities such as Treasuries to inject liquidity into the financial system and suppress longer-term borrowing costs, a tool deployed during past economic and financial crises. "I am not doing QE," Bessent stated emphatically. Instead, he has previously drawn parallels between his policy approach and the Fed's historical "Operation Twist" maneuver.
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