Treasury reveals $6B in debt buybacks, triple the normal level but markets slump
The Treasury Department on Wednesday announced plans to buy back up to $6 billion of government debt, triple the normal amount — but it still wasn’t enough to convince investors and long-term rates soared.Stocks also fell Wednesday as Brent crude oil futures surged above $100 a barrel for the first time since July, reheating concerns about inflation that could spur the Federal Reserve to hike interest rates.Treasury Secretary Scott Bessent — who has also been involved in unusual efforts to prop up the Japanese yen and Argentine peso — on Tuesday dared traders to bet against him, saying, “I have asymmetric information.I am the house now.”His ramp-up in debt buybacks has largely been seen as an attempt to cap soaring Treasury yields, which have hit levels not seen since the 2008 market crash.The rapid run-up in yields is threatening to hit consumers hard, raising borrowing costs on mortgages and auto loans and potentially hammering the stock market as Americans already face affordability issues.Mark White, wealth advisor at Mark White Wealth Advisors, told The Post that Wednesday’s market reaction shows investors are doubtful the buybacks will meaningfully lower yields.“While a $6 billion buyback can improve liquidity and provide some support at the margin, it’s simply not large enough to meaningfully change the fundamental forces driving long-term yields,” White said Wednesday.“Inflation concerns, rising deficits and the supply of Treasury debt are ultimately going to have a much greater influence on yields than a single buyback operation,” he said.On Aug.
19, Bessent said the department would at least double its buybacks, which implies just a $4 billion level, in an effort to keep bond markets functioning.The Treasury instead said Wednesday it would triple the operation, and it also said future operations will reach at least $4 billion.But markets were unimpressed, with Treasury yields rising as much as 5 basis points before easing on Wednes...