US Treasury Doubles Bond Buyback Draws Wall Street Criticism, Cooling Inflation Seen as Key to Breaking the Deadlock

August 21 news, the US Treasury Department announced that it will at least double the scale of Treasury bond buybacks from September 9 to November 4, and is preparing to expand buybacks of high-cost long-term debt, while issuing short-term bills to "replace long with short" to ease funding pressure. James Sullivan, co-head of global fundamental research at JPMorgan, said the strategy is akin to "using a credit card to pay off a mortgage" and cannot change the fundamental problem of approximately $40 trillion in federal debt. Goldman Sachs strategist Friedrich Schaper pointed out that without changing macro drivers such as inflation, the effect of expanding buybacks will be relatively short-lived; sustained moderate inflation data, which consolidates market expectations that the Fed will keep interest rates unchanged, is the main path to lowering Treasury yields.