The U.S. Treasury Department just issued the largest buyback of its own bonds in history.
The Treasury says the $10 billion operation is designed to repurchase securities maturing between July 15th, 2025 and May 31st, 2027.
Buybacks allow the Treasury to retire outstanding debt early, potentially reducing interest costs and adjusting its debt profile.
This big buyback comes as rising yields increase borrowing costs, with Federal Reserve Chairman Jerome Powell continuing to keep interest rates higher-for-longer.
In an April interview with Bloomberg, Treasury Secretary Scott Bessent dismissed concerns about foreign nations fueling a bond market selloff, pointing instead to investors unwinding leveraged positions.
At the same time, Bessent specifically called out the Treasury’s ability to increase its buyback program if necessary.
When asked whether he’s discussing concerns about the stability of the Treasury market with Powell, Bessent dismissed the notion that there’s any cause for alarm.
“Specifically, did we discuss some kind of a break the glass? I think we’re a long way from that.”
Historical records indicate the Treasury’s previous largest buyback happened in 2000, at approximately $3 billion.
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