Goldman Sachs discusses the UST buyback program."

Bessent got a lot more explicit yesterday. Buybacks can be more than $4bn per issue, Treasury has a "big toolkit," and he is now talking about fiscal consolidation. Bessent himself labeled their action as "...What I would call a Treasury twist here in terms of the bond market". The market did not respond well to the follow up communication though... most of the initial rates move reversed, with 10s back around 4.7% and 30s around 5.25%. Between joint yen interventions, long end buybacks, and an explicit willingness to do more, we are dealing with a highly active and tactical Treasury," GS notes.

"[Our] instinct remains that the more durable expression is lower dollar rather than structurally lower rates. While the comments on fiscal consolidation are potentially the most important new development, the market remains skeptical about the near-term execution and the specific mechanisms proposed (such as the Fraud task force) to achieve hundreds of billions in savings," GS adds.