What the Treasury is doing and why it matters
The Treasury steps into the secondary market to purchase older, less-liquid bonds, known as off-the-run Treasuries, injecting cash into the system and tightening spreads on securities that would otherwise sit in dealer inventory gathering dust.
The program was revived in May 2024 after a long absence, initially framed as a tool to smooth liquidity rather than to manage interest rates. By early 2025, the Treasury had already doubled the frequency of operations. By mid-August 2026, total quarterly buyback capacity had been raised to $38 billion.
US public debt has crossed $40 trillion, and long-end yields at the time of the announcement were trading at levels not seen since 2007.
The market’s lukewarm first reaction
