The US Treasury is doubling the amount of older long-term government debt it can purchase in individual buyback operations, expanding a liquidity program after long-term borrowing costs climbed to levels unseen in decades.
Beginning September 9, Treasury will raise the purchase maximum for its 10-to-20-year and 20-to-30-year nominal coupon buckets from $2 billion to at least $4 billion per operation, according to a Treasury Department announcement.
The higher limits will remain through November 4, when Treasury is scheduled to provide further guidance.
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The change comes after the government’s August 30-year bond auction cleared at 5.216%, the highest auction yield since 2001. The 10-year auction cleared at 4.683%, its highest level in 19 years, according to Reuters.
Long bonds rallied immediately after Wednesday’s announcement. The Financial Times reported that the 30-year yield fell about nine basis points to roughly 5.20%.
Treasury at limit
Treasury data suggest the larger ceiling also responds to persistent demand for the existing program. From May 19 through July 28, holders offered $50.4 billion of 10-to-20-year securities into three buybacks carrying a combined $6 billion purchase ceiling. Treasury bought the full $6 billion.
In the 20-to-30-year sector, investors offered $95.1 billion across four operations against an $8 billion maximum. Treasury again purchased the entire amount. Combined, $145.5 billion was offered against $14 billion of capacity.
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Treasury said the larger operations reflect the volume of eligible securities consistently offered by market participants. The department had already doubled the frequency of long-end buybacks in 2025 while retaining the $2 billion per-operation ceiling.
Not Treasury QE
The transactions are distinct from quantitative easing. Treasury’s liquidity-support program purchases less-liquid, off-the-run government securities to improve secondary-market functioning.
Federal Reserve QE, by contrast, involves central-bank asset purchases and expansion of reserve balances. Treasury must finance its expenditures and debt redemptions through cash resources and borrowing.
However, the QE comparison comes from the market effect rather than the mechanism. By buying older long-dated Treasuries, the government removes some duration risk from private portfolios, which can support bond prices and put downward pressure on long-term yields.
But Treasury buybacks remain fundamentally different from Federal Reserve QE. The transactions are part of debt and liquidity management, do not create central bank reserves, and aren’t described as monetary stimulus even if some investors see a similar effect in the long end of the bond market.
The new $4 billion-plus limit starts September 9. Treasury said an updated buyback schedule will be released separately.
