The U.S. Treasury is preparing a $6 billion buyback of older long-dated government debt, roughly triple its usual $2 billion operation, in a move officials say is designed to keep trading in government bonds running smoothly. The operation, scheduled for a 20-minute window from 1:40 p.m. to 2:00 p.m. Eastern on Thursday, Sept. 10, will target nominal Treasury securities with 10 to 20 years remaining, with settlement on Sept. 11. Eligible maturities span from Sept. 11, 2036 through Sept. 10, 2046.
Treasury had signaled on Aug. 19 that later operations would be at least $4 billion, but the $6 billion ceiling exceeds that minimum. The buyback focuses on 10-year and 20-year notes, where trading tends to be lighter than in shorter-dated debt. A May 2025 IMF working paper by Jing Zhou found modest improvements in Treasury trading liquidity and reduced dealer holdings from such operations, especially when dealer inventories were high. Treasury retires purchased bonds at settlement rather than lending them back into the market, so the direct effect is less inventory for dealers to carry rather than a new source of net liquidity.
Despite the announcement, yields continued to climb. The 10-year Treasury yield hit 4.841%, the 20-year reached 5.314%, and the 30-year rose about 5 basis points to settle near 5.307%. Federal debt has passed $40 trillion, while publicly held debt has climbed to $31.8 trillion, up 8.2% from a year earlier. Supply this year is 11.8% higher than in 2025. Tariffs, the war with Iran, and energy prices have added to inflation concerns; Brent crude moved above $100 a barrel on Wednesday. Annualized inflation hit a three-year high in May before falling to 3.4% in July, still 0.7 percentage point higher than a year earlier.
Federal Reserve Chair Kevin Warsh, who took over in May, said at Jackson Hole in August that it is the Fed's job to deliver stable prices, but did not say whether the central bank would raise rates soon. Stanley Druckenmiller criticized the Treasury's approach in a Wall Street Journal opinion piece, writing: Once markets believe Treasury is defending a price, every rise in yields becomes a test of official resolve, and the operations must grow to survive the tests. He added that governments defending prices against fundamentals always lose, with the only variable being how much they spend before conceding.
For Bitcoin, the question is whether the bond-market relief can extend into broader financing conditions. The buyback ceiling is a maximum face amount, with no minimum purchase commitment; Treasury may accept less or nothing depending on offers. CryptoSlate noted that the stronger signal for Bitcoin's liquidity thesis would be sustained improvement in bond trading and funding after the operation. Easier dealer intermediation could be a plausible first link, while persistent bond or funding strain would leave the proposed relief unestablished.
