On 19 August the Treasury said it would increase, “by at least double,” the size of its liquidity support buybacks in the ten to twenty and twenty to thirty year sectors, from $2 billion per operation to “at least $4 billion.” A liquidity support buyback is Treasury paying cash to dealers for old, illiquid bonds it already owes on, at prices the dealers name and Treasury can refuse. The change is effective 9 September and runs through the 4 November refunding (Treasury). Within five days two of the most serious people in this market had called it a mistake.
They’re both right about the intent. I think they’re both looking at the wrong side of the trade, and there’s a paper that says the mechanism is a third thing again.
Below the paid line: the full 22 operation table for 2026 printed row by row · the constant cap experiment, five sectors at an identical $4bn ceiling with cover from 1.3x to 11.0x · Nohshad Shah’s 13% recomputed against Treasury’s own auction table, and the IMF paper underneath the argument · the three readings of the 10 September print, each with the offer number that distinguishes it · the two operations where Treasury refused to fill, and what the curve did the next morning.
