Treasury Secretary Defends Bond Buyback Amid Market Criticism

Treasury Secretary Scott Bessent responded to criticism of the Treasury’s recent bond-buyback program, saying he sees no clear reason for opposition. He noted that the U.S. bond market is performing strongly and that yields have become closely linked to energy prices, reflecting a supply shock that he expects to resolve.

Bessent said the Treasury’s two recent Treasury auctions were successful and that the overall Treasury market remains in good condition. He added that term premiums for longer-dated bonds have not risen significantly, suggesting investors are not seeking extra compensation for holding longer-term U.S. debt.

The buyback program, intended to reduce supply and temporarily lower yields, has had limited lasting effect as inflation expectations rose amid supply disruptions and tariff concerns. As a result, 30-year Treasury yields have reached a 52-week high of 5.35% and 10-year yields have risen to 4.94%.

Market analysts, including UBS’s Paul Donovan, indicated that bond investors are more focused on inflation pressures, particularly the rapid increase in crude oil prices, rather than the Treasury’s deficit concerns. Donovan noted that the buyback plan has not produced a discernible impact on market behavior.

"If some of the Bloomberg Terminal bros are unhappy with what I’m doing, well, that’s too bad," Bessent said in response to a question from former White House strategist Steve Bannon.

"It’s a bunch of noise, and in my career I’ve made money ignoring the noise," he added, emphasizing his view that market signals, not policy actions, should guide decisions.