Treasury Secretary Scott Bessent moved to expand buybacks of long-term government debt, a step that pulled yields back from a selloff. Economists warned the action could add to inflation pressure and raise new questions about the Federal Reserve's independence under Chair Kevin Warsh.
The mechanism works against rising long-end yields by removing duration from private hands. That supply effect cooled the selloff. The inflation concern runs in the other direction: absorbing long-term paper injects liquidity, and more liquidity can feed price pressures the Fed is working to contain.
Buybacks also give the Treasury a direct lever on the shape of the yield curve, territory the Fed treats as its own. Economists flagged that dimension of the move as a potential encroachment on monetary policy independence. Both warnings, on inflation and on institutional boundaries, trace to the same mechanism.