U.S. Treasury Secretary Says Bond Buybacks Aim to Increase Liquidity and Manage Debt Structure

U.S. Treasury Secretary Scott Bessent stated that the dollar still accounts for 89.2% of global foreign exchange transactions, with foreign investors holding a significant amount of U.S. assets, and major stablecoins being dollar-denominated, indicating that data does not support claims of capital flight from the U.S. Bessent pointed out that the purpose of the Treasury's bond buybacks is to increase market liquidity and manage the debt maturity structure, rather than attempting to control the over $30 trillion U.S. bond market. He emphasized that if investors were unwilling to purchase U.S. bonds, actual bidding data should reflect this, but currently, demand for U.S. assets from foreign funds remains strong. Norway has shifted part of its U.S. bond allocation to agency debt, and the Netherlands has repatriated gold from North America, indicating a preference for domestic asset custody. The Atlanta Fed expects the annualized growth rate of U.S. real GDP in the third quarter to be 5.1%. Recent data shows continued job growth, ongoing expansion in business investment and capital expenditures, with equipment investment in the second quarter of 2026 expected to increase by nearly 20% compared to the end of Biden's term. Bessent criticized The New York Times for selectively ignoring data that contradicts its narrative, arguing that the complex financial reality should not be simplified to serve predetermined positions.