The Treasury's Debt Buyback: A Recipe for Disaster The recent announcement by Treasury Secretary Scott Bessent to increase buybacks of long term bonds has sent shockwaves through financial markets.
Economists warn that this move puts the dollar in a devaluation spiral similar to Japan's, where attempts to keep bond yields artificially low have led to investor confidence erosion and currency depreciation.
At its core, the issue lies with the underlying problem: mounting stress in the Treasury market. The $32 trillion Treasury market has been under pressure due to rising yields.