The US Treasury increased its liquidity-support buyback operations to at least $4 billion per operation, pressuring the dollar.
The US Treasury announced it will double the size of its liquidity-support buyback operations for longer-dated Treasury securities, raising the maximum purchase from $2 billion to at least $4 billion per operation. Treasury Secretary Bessent indicated the move aims to signal that yields do not reflect fundamentals and could exceed $4 billion depending on conditions.
The intervention had a QE-like effect, lowering long-term yields and easing financial conditions, though it is not classified as quantitative easing. The dollar sold off broadly following the announcement, as long-term yields are sensitive to shifts in economic outlook and monetary policy expectations.
Attention now turns to Federal Reserve official Warsh’s upcoming speech at the Jackson Hole Symposium, which may influence market sentiment further if he addresses the easing financial conditions.