๐จ๐ธ The U.S. Treasury Department has been secretly pouring $20 billion into a massive Treasury buyback operation in just two weeks! ๐ฑ
The Treasury’s June 3rd and June 10th buybacks, which are record-breaking in size, allow the agency to repurchase securities maturing between May and July of this year.
This has sparked a flurry of social media speculation that a stealth quantitative easing operation is now underway, with the Treasury mimicking the Federal Reserve’s money-printing tactics to stimulate the economy. ๐ค
But skeptics argue that by repurchasing illiquid bonds with borrowed funds, the Treasury is subtly propping up the bond market to maintain confidence in an overextended system. ๐ค
“Everyone is calling Treasury buybacks ‘stealth QE.’ They misunderstand. This is the Treasury, not the Fedโฆ” – Jim Bianco, Bianco Research
“The Treasury cannot ‘print.’ The Treasury borrows new more liquid ‘on-the-run’ bonds and uses the proceeds to buyback old illiquid ‘off-the-run’ bonds. Buybacks do not ‘create money,’ rather they improve the overall quality of the bond market.”
Treasury Secretary Scott Bessent recently boasted about the agency’s “big toolkit” to support the bond market if needed, citing buybacks as a strategic option to enhance liquidity and stabilize conditions. ๐ ๏ธ
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2025-06-14 20:02