The U.S. Treasury doubled its debt buybacks to support the bond market as long-term yields rose, but investment firm Creative Planning‘s Chief Market Strategist Charlie Bilello said the move did not reduce the nation’s overall debt.
Treasury Doubles Bond Buybacks
On Wednesday, Treasury said it will at least double the maximum size of its buyback operations from $2 billion to $4 billion, targeting securities in the 10- to 20-year and 20- to 30-year maturity ranges.
The expanded operations are scheduled to begin Sept. 9 and continue through Nov. 4.
The move came as longer-term Treasury yields climbed to levels not seen in nearly two decades. Following the announcement, the 10-year Treasury yield fell to 4.647%, while the 30-year yield dropped to 5.196%.
Treasury said the larger operations are intended to provide "greater liquidity support" to longer-dated securities.
Charlie Bilello Warns of ‘Debt Reshuffling‘
Bilello criticized Scott Bessent-led department on X, writing, "The Treasury Department is calling this a ‘debt buyback.’ But they’re not reducing the debt."
He added, "They’re running huge deficits, buying back old bonds, and issuing even more new ones."
"This is debt reshuffling, not debt reduction," the Market Strategist said.
Bilello later argued that markets understood the broader implications, writing: "More deficits. More debt. And a desperate attempt at financial repression."
Economists Warn of Bond Risks
Economist Steve Hanke warned that rising risks and inflation expectations could drive further selling in U.S. Treasuries, saying he remained "very bearish" on bonds and expected the 10-year yield to rise another 50 basis points.
He said bond-market repricing could eventually spread to stocks and deflate the "stock market bubble."
Meanwhile, economist Peter Schiff argued that higher bond yields could ultimately boost gold’s appeal as inflation eroded the real value of fixed-income investments.
He said investors selling gold because of rising yields were "misreading" the market, arguing that higher yields could push more money into gold as investors sought an alternative store of value.
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