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Treasury Plans to Buy Up to $6B in Bonds as Bessent Looks to Rein in Debt Costs

Sandy Verma | September 10, 2026 10:24 AM CST

Treasury Plans to Buy Up to $6B in Bonds as Bessent Looks to Rein in Debt Costs/ TezzBuzz/ WASHINGTON/ J. Mansour/ The Treasury Department plans to buy back as much as $6 billion in older government securities with remaining maturities of 10 to 20 years. The liquidity-support operation is three times the previous $2 billion maximum for comparable long-term buybacks. The announcement did not immediately lower the 10-year Treasury yield, suggesting investors remained concerned about inflation, deficits and federal borrowing.

FILE – The Treasury Department building is pictured at dusk in Washington, June 6, 2019. (AP Photo/Patrick Semansky, File)

Quick Look

Treasury scheduled the buyback for Thursday, Sept. 10.
The operation will accept up to $6 billion in eligible securities.
Targeted bonds fall within the 10- to 20-year maturity sector.
Comparable operations previously carried a $2 billion maximum.
Treasury describes the transaction as a liquidity-support buyback.
The objective is to improve trading in older, less-liquid securities.
The 10-year Treasury yield rose after the announcement.
Treasury Secretary Scott Bessent said investors were mispricing U.S. debt.
A buyback does not necessarily reduce total federal debt.
Treasury may issue newer securities while retiring older bonds.

Deep Look

Treasury schedules larger bond buyback

WASHINGTON — The Treasury Department plans to buy back as much as $6 billion in older U.S. government securities as borrowing costs rise across the bond market.

The operation is scheduled to take place Thursday and will focus on nominal coupon securities in the 10- to 20-year maturity sector. Treasury’s published schedule identifies eligible securities maturing between September 2036 and September 2046.

The department designated the transaction as a liquidity-support operation and set a maximum purchase amount of $6 billion.

Operation is three times the previous limit

The planned transaction is three times the $2 billion maximum Treasury previously used for comparable longer-term buybacks.

Treasury announced in August that it would at least double the size of liquidity-support operations involving 10- to 20-year and 20- to 30-year nominal securities. The department said the maximum would rise from $2 billion to at least $4 billion per operation.

Its subsequent schedule set Thursday’s particular buyback at a higher $6 billion ceiling.

What a Treasury buyback does

During a buyback, Treasury offers to purchase outstanding government securities from investors before those bonds reach maturity.

The department can target older securities that trade less frequently than newly issued benchmark debt. Removing some of those bonds from the market can improve liquidity by concentrating trading activity in newer issues.

Research from the Federal Reserve Bank of New York shows that the small share of Treasury debt represented by the newest, or “on-the-run,” securities accounts for most daily trading. Older “off-the-run” securities comprise most outstanding debt but receive substantially less trading activity.

Buyback is not necessarily debt reduction

Although Treasury is repurchasing bonds, the operation should not automatically be interpreted as a $6 billion reduction in the national debt.

Treasury may fund buybacks through cash management or by issuing new securities. In that situation, the government changes the composition of its outstanding obligations instead of permanently eliminating an equivalent amount of debt.

Treasury has said buybacks can improve liquidity in older securities, smooth fluctuations in bill issuance and help the department manage its cash balance.

The amount ultimately purchased may also be less than $6 billion because the announced figure is a maximum rather than a guaranteed transaction total.

Rising yields increase pressure on borrowers

The larger operation comes as Treasury yields have risen over recent months.

When bond prices fall, their yields rise. Higher Treasury yields increase the interest expense associated with federal borrowing and influence rates throughout the economy.

The 10-year Treasury yield is particularly important because it serves as a reference point for mortgages, corporate debt and several other forms of long-term borrowing.

Higher yields can therefore increase costs for homebuyers, companies and consumers as well as the federal government.

Market reaction remains cautious

The 10-year Treasury yield rose following the announcement instead of falling.

That movement indicated that investors did not immediately view the buyback as sufficient to offset broader forces affecting the bond market, including inflation, the federal deficit, expectations for future Treasury issuance and monetary policy.

A single liquidity operation can affect trading conditions in selected securities, but it does not give Treasury direct control over market interest rates.

Bessent challenges investors

Treasury Secretary Scott Bessent has argued that markets are assigning excessive borrowing costs to U.S. government debt.

At an event Tuesday, Bessent projected confidence in Treasury’s ability to influence financial conditions and defended other market interventions undertaken during his tenure.

The comment presented Treasury as possessing information and policy tools unavailable to ordinary investors. Market participants, however, continue to determine bond prices and yields through trading.

Treasury revived buybacks in 2024

The modern Treasury buyback program began in May 2024more than two decades after the department had last conducted regular repurchases.

Treasury initially used the program to support liquidity in older securities and improve cash management. It gradually increased the frequency of long-term operations as the volume of outstanding government debt expanded.

In July 2025, Treasury announced that it would increase 10- to 20-year and 20- to 30-year liquidity operations from two to four per quarter while retaining a $2 billion maximum for each transaction.

The September 2026 increase represents a significant expansion from that framework.

Additional buybacks are scheduled

Thursday’s transaction is part of a broader series of planned Treasury operations.

The tentative schedule includes:

A $500 million inflation-protected securities buyback on Sept. 15.
A $4 billion operation in the seven- to 10-year sector on Sept. 17.
A buyback of at least $4 billion in the 20- to 30-year sector on Sept. 24.
Another 10- to 20-year operation of at least $4 billion on Oct. 1.

Treasury may adjust those plans according to market conditions and its financing requirements.