US Treasury doubles debt buybacks, dollar weakens
Bessent raises buybacks from $2 billion to at least $4 billion per operation. Wall Street closes higher on August 21, but S&P 500 and Nasdaq break a three-week winning streak; gold at three-month highs, euro above 1.17, Brent rises for a sixth consecutive session.
US Treasury Secretary Scott Bessent announced the doubling of long-term debt buybacks: from $2 billion to at least $4 billion per operation. The announcement was reported by TheStreet, which also cites references to currency interventions on the yen and peso and to new public accounts consolidation plans.
“We’re going to increase the size of the buyback” (transl. from English) — Scott Bessent, US Treasury Secretary
The buyback is the tool through which the Treasury repurchases already-issued securities on the secondary market, generally to support liquidity for less-traded maturities. Doubling its size means increasing public demand for long-dated securities: a move that acts on yields and, indirectly, on the exchange rate.
The session and the week
On Friday, August 21, US indices closed higher.
| Index | August 21 close |
|---|---|
| Dow Jones | +517.80 points |
| S&P 500 | +33.21 points |
| Nasdaq | +113.29 points |
| Russell 2000 | 3,017.87 (+0.9%) |
The weekly tally tells the opposite story, however: the S&P 500 and Nasdaq broke a three-week streak of gains, and the Russell 2000 posted its sharpest weekly decline since the week beginning June 1. The yield on the US 10-year rose from 4.69% on Thursday to 4.73% on Friday. The day before, Wall Street had closed lower, with the Dow down 1.3% — 703.84 points, at 52,759.21 — amid tensions between the United States and Iran, as reported by TS2 Tech based on closing figures released by Reuters and Associated Press and by Yahoo Finance with analysis from Zacks Equity Research on August 20 data. The same week’s released data show US economic activity growing at its fastest pace in four years.
Weak dollar, strong commodities
The most visible effect of the intervention on the bond market showed up in the exchange rate. Gold rose to three-month highs, bitcoin moved to around $77,000 — levels not seen since May — and the euro surpassed 1.17 dollars for the first time, also since May. Brent rose for a sixth consecutive session, with a weekly gain of 6.39%: this is reported by the same cross-asset data from TS2 Tech, the daily report from Investrade and the markets service of Bloomberg.
The overall picture must be considered with caution. Available sources link the rise in gold and bitcoin to the dollar weakening triggered by the Treasury’s intervention, while for oil the sequence of six consecutive gains overlaps with tensions in the Gulf that weighed on Thursday’s session. These are two distinct causal chains moving in the same direction — dollar down, commodities up — and the available data do not allow for quantifying the relative weight of each.
One element nonetheless remains measured: the US yield curve stiffened by four basis points on the 10-year on the same day the Treasury announced it wanted to buy more long-dated securities. Upcoming auctions will show whether the larger buyback volume can offset that pressure.
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