The Treasury Department just announced it will double its bond buybacks this fall, scrambling to suppress long-term interest rates that have climbed to their highest levels since 2007 — a direct hit to the mortgages and consumer loans ordinary Americans pay every day, driven by a $40 trillion national debt and foreign governments working the currency system against U.S. workers.
Why it matters: The bond market is punishing American borrowers while foreign actors like Switzerland and Japan play monetary games, and the institutional response is more financial engineering — not fixing the underlying debt addiction. The national debt hit $40 trillion on Wednesday, just five months after crossing $39 trillion, according to the Treasury Department. Someone has to finance that mountain, and the cost is being passed straight to working Americans through higher rates.
Treasury Secretary Scott Bessent said the department will target the 10- to 30-year portion of the market, where a buyers' strike has been underway since late June. The buyback maximum jumps from $2 billion to "at least" $4 billion, running September 9 through November 4. Yields plummeted after the announcement — the 10-year note dropped 6 basis points to 4.647% and the 30-year bond fell 9 basis points to 5.196%, according to CNBC, as reported by UPI News.
Trump called out the rigged system directly. Speaking from the Roosevelt Room, he told the Washington Examiner he retains the "absolute right to cut off all business with a country like Switzerland," adding: "I don't want to single them out because there's 60 countries like that. They live off the United States, so why are we paying higher interest rates than them?" He's right to ask. In the old days, America's strength meant it paid the lowest rates. Now foreign monetary manipulation flips that logic.
Bessent has already moved once on the foreign front, conducting a joint operation with Japan to boost the yen — which had been trading at its weakest against the dollar in roughly 40 years. He warned in January that Japanese government bonds were causing problems in the U.S. Treasury market, UPI News reported.
The yields are being pushed up by the war with Iran, growing competition for financing, and expanding federal deficits, Politico reported, per UPI News. Trump pointed fingers at the Federal Reserve, calling the board political and noting Obama- and Biden-appointed members still vote to raise rates. "Years ago, 25 years ago, when the country announced good numbers, interest rates went down because we had a stronger country," he said.
Not everyone is buying the buyback strategy. Krishna Guha of Evercore ISI said the move "changes almost nothing in terms of the fundamentals, in particular the unchanged need to finance the tidal wave of hyperscaler debt in addition to very large government deficits." RSM Chief Economist Joe Brusuelas went further, calling Bessent "a political actor" whose interest "is purely short-term and organized around the upcoming election and not a return to price stability." The buyback could artificially suppress yields and make the Fed's inflation fight harder.
The market is already pricing in less Fed action: the chance of a September rate hike has fallen to 56%, down from 82% after the July meeting, according to the Atlanta Fed's tracker.
The question neither party wants to answer: what happens when buybacks and rate cuts can't outrun $40 trillion in debt and a global system built to make American workers foot the bill?
