The Treasury quietly redesigned its bond strategy in plain sight. Scott Bessent said the Treasury has “a big toolkit” to stabilize markets if the Fed refuses to act.
https://www.bloomberg.com/news/articles/2025-04-14/bessent-says-treasury-has-big-toolkit-if-needed-for-bond-market
He also warned that yields have become too high: “It wouldn’t make sense for the government to ramp up sales of longer‑term securities given where yields are today.”
https://www.bloomberg.com/news/articles/2025-06-30/bessent-says-current-yields-mean-no-sense-in-long-debt-ramp-up
Bessent mentioned in a recent interview that he has breakfast with Powell every week. He also stated plainly: “If the Fed doesn’t step in, the Treasury can up the buybacks.” A week later, Treasury buybacks doubled. That’s not coincidence. That’s direction. The shift moves execution away from the Fed and into Treasury hands while preserving the illusion of coordination.
The Treasury doubled long-end coupon buybacks and raised cash‑management buybacks from $120 b to $150 b annually. It’s a disguised yield-suppression tool operating outside formal QE. Ballooning T‑bill issuance funds deficits while backdoor buybacks support bond prices. That sidelines Powell without saying it out loud. The setup reads like prelude to yield-curve control, only this time under fiscal, not monetary, command.