It’s Treasury Vs The Fed: With Fed Sidelined, Bessent Unleashes Record $10 Billion Bond Buyback

• It’s Treasury Vs The Fed: With Fed Sidelined, Bessent Unleashes Record $10 Billion Bond Buyback
  by Tyler Durden, https://www.zerohedge.com/
  Back on April 14 when bond yields were soaring in the aftermath of Trump’s liberation day amid speculation that China or Japan were selling some of their US paper to stabilize their currency, a selloff which was compounded by the concurrent unwind of the massive $2 trillion basis trade, Treasury Secretary Steve Bessent appeared on Bloomberg TV to ease fears of a wholesale unwind of the US bond market. In the interview, among other things, Bessent revealed that he has breakfast with Powell every week, and also said that if the Fed does nothing, he might take matters in his own hands, and since the Treasury has a “big toolkit” one of the things it could do is “up the Treasury buybacks” (to prop up Treasuries, in lieu of QE). 
  –
  Six weeks later, with the Fed sidelined and unwilling to do anything to ease the plight of US treasuries which continue to trade at dangerous levels – the 30Y is flirting with a 5% level – it appears this is what Bessent has done.
  –
  At 2pm on Tuesday afternoon, the Treasury announced the results of its latest Treasury buyback operation (which some had likened to a QE lite because it effectively monetizes Treasuries in the open market, similar to the Fed’s POMO operations, and similar to stock buybacks). While the operation itself was not remarkable – the Treasury had been holding these these more or less weekly since April 2024 – the size of it was: at $10 billion, this was the largest Treasury buyback operation in history.
  –
  read more.

end