The U.S. Treasury Department has announced a significant escalation in its efforts to manage rising borrowing costs by doubling its purchases of longer-dated bonds, specifically targeting securities maturing in 10 to 30 years. The buyback operations will increase from $2 billion to at least $4 billion per operation over the next two months [1]. This move comes as the U.S. gross national debt has surpassed $40 trillion for the first time, just four and a half years after exceeding $30 trillion. The government deficit for the current year has reached $1.8 trillion, with a $432.3 billion deficit reported in July alone, marking the highest monthly total since March 2021 [1].
The Treasury's actions had an immediate impact on financial markets. Bond prices rose, causing yields to fall: the 30-year Treasury yield dropped roughly 9 basis points to around 5.19%, its largest one-day decline since October 2025, while the benchmark 10-year yield fell to about 4.64%. This decline in yields helped end a three-day losing streak for stocks, with all three major U.S. indexes rising approximately 0.2%. Cryptocurrencies also benefited, with bitcoin gaining more than 7% and ether rising over 18%, as these assets are seen as risk assets that typically appreciate when Treasury yields fall [1].
The article highlights that years of escalating budget deficits, exacerbated by pandemic-era stimulus spending, have pushed the public share of the debt close to 100%. Interest payments on the debt have reached nearly $1.2 trillion this year, making it the largest budget expenditure after Social Security and Medicare [1].
President Trump expressed dissatisfaction with the current cost of borrowing, criticizing the Federal Reserve for maintaining what he described as "artificially high" interest rates. He compared U.S. rates to Switzerland's, noting, "I see countries like Switzerland where they're the number one lowest interest rates, a half a percent, and we pay three and a half percent." Trump also threatened to cut off business with countries like Switzerland and announced plans for severe economic measures against Iran, describing it as the "most crushing economic operation ever taken against any country" [1].
CONCLUSION
The U.S. Treasury's decision to double long-term bond buybacks is a direct response to surging national debt and elevated borrowing costs, resulting in lower yields and a positive reaction in both equity and cryptocurrency markets. However, the growing debt burden and high interest payments remain significant concerns for policymakers and investors. President Trump's criticism of current monetary policy and threats of economic action against Iran add further uncertainty to the outlook.