US Treasury Secretary Bessent says, on buyback announcement, we are trying to signal this is a thinly traded area in the market; notes sized could be more than USD 4bln

• We have a big toolkit, "we will see" when asked about reversal in yields.
• Part of it is signalling.
• 30-year liquidity is very poor.
• Will announce increased focus on fiscal consolidation (either end of this week or next week).

• Nothing magic about USD 40tln figure.

Treasury buyback programmes of this kind sit in a familiar lineage of liquidity-support operations: authorities in past episodes have used targeted repurchases in the least liquid tenors, the long end being the classic case, to smooth functioning without altering the stance of monetary policy. The stated rationale here is signalling into a thinly traded part of the curve, which is consistent with how such operations have typically been framed, as market-functioning tools rather than duration management, though participants have historically treated the distinction as porous. The mechanism to watch is the effect on the off-the-run versus on-the-run spread and on the 30-year sector specifically, since buybacks concentrated there tend to richen cheap, illiquid issues relative to the belly rather than move the level of yields outright. Sizing in the low single-digit billions is small against the outstanding stock, which is why the signalling element carries most of the weight; comparable operations have derived their effect from the perception of a standing bid rather than from flow. The announced pivot toward fiscal consolidation messaging is the larger tell, since issuance composition and coupon supply at future refundings are what ultimately drive term premium. The follow-ons are the operational details, the cadence and tenor mix of purchases, and whether the consolidation framing shows up in the next refunding statement.