The U.S. Treasury doubled its debt buybacks to support the bond market as long-term yields rose, but investment firm Creative Planning‘s Chief Market Strategist Charlie Bilello said the move did not reduce the nation’s overall debt.
Treasury Doubles Bond Buybacks
On Wednesday, Treasury said it will at least double the maximum size of its buyback operations from $2 billion to $4 billion, targeting securities in the 10- to 20-year and 20- to 30-year maturity ranges.
The expanded operations are scheduled to begin Sept. 9 and continue through Nov. 4.
The move came as longer-term Treasury yields climbed to levels not seen in nearly two decades. Following the announcement, the 10-year Treasury yield fell to 4.647%, while the 30-year yield dropped to 5.196%.
Treasury said the larger operations are intended to provide "greater liquidity support" to longer-dated securities.
Charlie Bilello Warns of ‘Debt Reshuffling‘
Bilello criticized Scott Bessent-led department on X, writing, "The Treasury Department is calling this a ‘debt buyback.’ But they’re not reducing the debt."
He added, "They’re running huge deficits, buying back old bonds, and issuing even more new ones."
"This is debt reshuffling, not debt reduction," the Market Strategist said.
The Treasury Department is calling this a "debt buyback."
— Charlie Bilello (@charliebilello) August 19, 2026
But they’re not reducing the debt.
They’re running huge deficits, buying back old bonds, and issuing even more new ones.
This is debt reshuffling, not debt reduction. https://t.co/Vze7DQfFHd pic.twitter.com/ZVU1lyHA7J
Bilello later argued that markets understood the broader implications, writing: "More deficits. More debt. And a desperate attempt at financial repression."
Treasury announces bigger "debt buybacks."
— Charlie Bilello (@charliebilello) August 19, 2026
Bitcoin +5%. Gold +3%. US Dollar -1%.
Markets understand what this really means:
More deficits. More debt. And a desperate attempt at financial repression.
Instead of addressing the elephant in the room – higher interest rates driven… https://t.co/g4ccEyEJOI pic.twitter.com/MS2D6Utxo7
Read Also: Gold Jumps 3% as Bessent's Treasury Steps Into Bond Rout
Economists Warn of Bond Risks
Economist Steve Hanke warned that rising risks and inflation expectations could drive further selling in U.S. Treasuries, saying he remained "very bearish" on bonds and expected the 10-year yield to rise another 50 basis points.
He said bond-market repricing could eventually spread to stocks and deflate the "stock market bubble."
Meanwhile, economist Peter Schiff argued that higher bond yields could ultimately boost gold’s appeal as inflation eroded the real value of fixed-income investments.
He said investors selling gold because of rising yields were "misreading" the market, arguing that higher yields could push more money into gold as investors sought an alternative store of value.
Read Also: Fed Minutes Were Not Hawkish Enough To Halt Wednesday's Bond Rally
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
