Washington buys back its own debt. The US Treasury has at least doubled the maximum size of its repurchase operations on long-term bonds. Since September 9, the ceiling applied to maturities between ten and thirty years has increased from 2 to at least 4 billion dollars per operation. Scott Bessent even reserves the possibility of going further.
The official objective is to improve the liquidity of a market under pressure. However, these buybacks can also support the price of the bonds concerned and weigh on their yields. Bitcoin investors therefore see this as a possible easing of financial conditions, even if the operation remains very different from a Federal Reserve purchase program.
Key Points
The US Treasury has at least doubled its buybacks of long-term bonds, financed by the issuance of short-term bonds.
The program officially aims for market liquidity, with no stated objective of capping returns.
Redemptions must be offset by new issues, but their exclusive financing by short-term bonds has not been established.
The GENIUS Act could strengthen demand for short debt thanks to stablecoin reserves.
The US Treasury increases its buybacks of long bonds
During a buyback, the Treasury takes back bonds already held by investors before their maturity. This operation can facilitate exchanges on old issues, which are sometimes less liquid than securities recently placed on the market.
The program has existed since May 2024. Originally, the Treasury planned up to $30 billion in quarterly repurchases intended to support liquidity, to which were added cash management operations. In August 2026, it raised the ceiling applicable to each intervention on long maturities from at least $2 billion to $4 billion. The first enlarged operation ultimately had a ceiling of 6 billion and made it possible to repurchase 5.19 billion dollars of securities.
However, this increase does not guarantee a lasting drop in yields. The American thirty-year rate reached 5.19% on the day of the announcement, then 5.37% during the first reinforced operation. The market therefore quickly absorbed the signal sent by Washington.
Scott Bessent explained that the Treasury wanted to âmake a marketâ on these bonds and show that it considered the yields excessive in view of the fundamentals. On the other hand, his formula âI am the house nowâ concerned an intervention on the yen and his knowledge of Japanese decisions. Linking it directly to debt buybacks would be misleading.
Bitcoin and stablecoins: An easing not to be confused with QE
The Treasury points out that each dollar spent on buybacks must, all things being equal, be offset by a dollar of new debt. However, no mechanism provides that each withdrawn long bond is directly replaced by a short-term bond.
The comparison with monetary easing (the famous QE) comes rather from the general composition of emissions. In 2024, Stephen Miran and Nouriel Roubini estimated that the increased use of short bonds would reduce the ten-year yield by around 25 basis points, an economic effect comparable to a 100 basis point cut in the Fed rate.
This estimate, contested, related to the entire issuance policy and not to current buybacks, as we can read in Craig Tindale's short essay. The Fed has also been buying Treasury bonds since December 2025, after stopping the reduction of its balance sheet. However, it presents these purchases as bank reserve management operations, and not as a new QE program intended to stimulate the economy.
Stablecoins can, for their part, support the demand for short debt. The GENIUS Act notably authorizes their issuers to hold Treasury securities whose remaining maturity does not exceed 93 days. Reserves may also include cash, bank deposits and certain monetary products. The system is due to come into force in January 2027.
Tether already declared around $141 billion in direct and indirect exposure to Treasury bonds at the end of March 2026. A growth in stablecoins would therefore likely reinforce this demand, without their reserves directly financing each buyback of long bonds.
