U.S. debt faces another pivotal week with buybacks and a new auction

Investors are turning their attention back to U.S. government debt as the Treasury prepares a larger buyback operation and a new long-term bond auction. The measures aim to ease pressure on long-term yields, which raise borrowing costs for consumers.

Starting Wednesday, the department led by Scott Bessent plans to at least double its purchases of nominal coupon securities in the 10-to-20-year and 20-to-30-year maturities. Each operation will grow from $2 billion to at least $4 billion and continue through Nov. 4.

On Sept. 10, the Treasury is scheduled to reopen a 30-year bond issue. Its yield has remained between 5.24% and 5.25%, close to its highest level in 19 years. The move follows a G20 meeting of finance officials and central bankers in North Carolina, where Bessent focused on easing concerns about U.S. bonds and the size of federal debt.

Bessent said at the meeting that “the only way out” of a debt picture worsening in the United States and globally was through growth, which he said the Trump administration had made a priority. But pressure on the 10-year bond continued. Its yield closed the week above 4.78%, the highest since July 2004, and 50 basis points above its level when Donald Trump returned to the White House. The increase followed a report that the United States created 162,000 jobs in August, well above analysts’ estimates. The data pointed to an economy with a resilient labor market and inflation still above 3%, potentially giving the Federal Reserve more room to raise rates on Sept. 16.

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The only way out