U.S. Treasury Secretary Scott Bessent on Thursday said he may increase again the volume of Treasury bonds the government will repurchase, a day after surprising the market with plans to double them.
"We're going to increase the size of the buyback," Bessent said in a CNBC interview. "I would note that it could be more than the $4 billion per issue."
The Treasury on Wednesday announced that it would double the size of buybacks on longer-dated securities over the next quarter to at least $4 billion, a move that stanched this week's rise in 30-year bond yields to 19-year highs. The 30-year yield had rebounded earlier on Thursday, but Bessent's comments briefly curbed the increase. It last traded at 5.24%.
Bessent told CNBC that his objective was to support liquidity in an area of the market that is thinly traded, especially in August, while having to compete with a lot of corporate issuance at higher yields, including for artificial intelligence infrastructure.
"Part of it is signaling here, and to show that we believe that the yields don't reflect the underlying fundamentals. This Iran conflict, we will get on the other side of this, we don't know when," Bessent said.
A day after total U.S. public debt outstanding crossed the symbolic $40 trillion threshold, Bessent said he and White House budget director Russell Vought will be embarking on a new fiscal consolidation effort directed by President Donald Trump, and that combined with efforts to cut waste, fraud and abuse, savings of "several hundred billion dollars" could be found.
He added that there was "nothing magic about the $40 trillion figure" and that the U.S. would grow its way out of the debt. In the meantime, he said that the deficit this year has been pushed up by refunds of Trump's tariffs declared illegal by the Supreme Court, a phenomenon that would not be repeated next year, as new tariffs are being implemented under other trade laws that have withstood court challenges.
He added that he expected 2026 tariff revenues to match those of 2025, but did not specify whether he was referring to calendar or fiscal years.
Also curbing revenues is a wave of factory and data center construction that is being immediately expensed against corporate profits under the Republican 2025 tax cut act, causing a drop in corporate tax revenues, Bessent said.
