Treasury Secretary Bessent Vows Bigger Buybacks After Debt Hits $40 Trillion

US Treasury Secretary Scott Bessent stated on Thursday that the Treasury will increase the size of its debt buybacks, less than 24 hours after doubling them.

Bessent clarified that Wednesday's $4 billion ceiling per operation is a floor, not a strict limit, and that buybacks could be more than the $4 billion per issue. He attributed the move to signaling that yields do not reflect underlying fundamentals and to address weak liquidity at the 30-year point. The 30-year yield is trading at 5.25% after hitting 5.33% on Tuesday, and the 10-year yield is at 4.7% after topping 4.75% on the same day.

Bessent also announced a forthcoming fiscal consolidation plan from President Trump, focusing on both revenue and cost sides, expected by the end of this week or early next week. The US gross national debt surpassed $40 trillion for the first time on Tuesday, according to Treasury Department data released Wednesday. This figure includes $32 trillion owed to investors and other outside holders, with the remainder owed to government accounts.

The debt has grown by $3 trillion in the past year alone and has doubled since January 2017, when it stood at roughly $20 trillion. The Congressional Budget Office projects a deficit of approximately $2.1 trillion for this fiscal year, with the Treasury needing to refinance $9.7 trillion in debt coming due. Bessent downplayed the $40 trillion milestone, stating, there's nothing magic about the $40 trillion number and we can grow our way out of that.

He also suggested the US budget deficit under President Trump has likely peaked. Lawmakers from both parties have condemned the debt surge. Republicans attribute the increase to unaffordable socialist policies and out-of-control spending, while economists and Democrats point to Republican tax cuts and military spending, noting an $11.6 trillion debt surge across President Trump's two White House terms.