Bessent calls Treasury bond buyback successful, reiterates he has tools to stabilize bond market

Treasury Secretary Scott Bessent on Tuesday said his intervention in the bond market last week was "successful," while reiterating that he has the tools to take further action.

Bessent was asked during a hearing before the House Financial Services Committee whether the Treasury's decision to buy back $6 billion in long-dated government bonds was successful, given that the yield on the 10-year Treasury bond has risen since then. Bessent encouraged looking at the "counterfactual" of what it would have done, suggesting the yield could have been even higher. He pointed out that the Treasury subsequently held two of the most successful bond auctions in 20 years.

On Sept. 10, Treasury sought to buy back up to $6 billion of government debt , triple the normal buyback operation and far above Bessent's Aug. 19 announcement that the department would at least double the amount of long-term bonds it buys back. The actions are aimed at keeping government debt markets liquid, but the measures have been viewed as an effort to put a lid on Treasury yields.

The yield on the 10-year Treasury breached 5% Tuesday, a level not seen since 2007, as oil prices have marched higher on renewed tensions in the Middle East, inflation concerns , and soaring US debt. The US national debt recently crossed $40 trillion .

When asked whether the US needs to tackle its debt problem to bring down yields, Bessent concurred but said it's just one of the forces driving up the 10-year yield.

Bessent also again promised a "fiscal consolidation" plan coming soon, without offering any details.

As Treasury finishes drafting rules for the GENIUS Act, the 2025 law governing stablecoins, Bessent predicted an increase in demand for US safe-haven assets, especially Treasury bills. The implication is that it could push down bond yields, while simultaneously buttressing the dollar against other currencies.

Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance, she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X @Jenniferisms and on Instagram .