Treasury tripled the maximum size of its September 10 bond buyback on Wednesday, following through on last month’s ad hoc intervention.

Official excuses aside, the August 19 announcement — which promised to “at least double” the size of regular buybacks — was aimed at capping long-end US yields.

As a quick reminder: Treasury buybacks aren’t for that. Their raison d’être is providing liquidity for off-the-runs and/or addressing market dislocations. The Treasury market was experiencing no such dislocations last month. Rather, yields had simply drifted too high for Donald Trump’s liking ahead of the mid-terms. Scott Bessent was enlisted to address the problem.

Bessent, aka “The House” (“My name’s not Scott. They call me the butcher“), said he’ll buy back up to $6 billion in 10- to 20-year debt this week, up from $2 billion for a “normal” operation.

Why $6 billion? Well, this is where it gets funny. Or, funnier. Since there was no market function rationale for upsizing the buybacks in the first place (i.e., no liquidity problem to fix), sizing the buybacks was all about guessing what counts as “large” versus market expectations.

Plainly, $4 billion would’ve been a major disappointment. Bessent’s original language from last month said the operations would “at least” double, so $4 billion was the bare minimum. Bessent appears to have reckoned that tripling the buybacks would impress markets. But it didn’t. Not initially anyway.

As the figure shows, 10-year yields rose more than 4bps in the wake of Wednesday’s big unveil. At 4.845%, they were the highest since Janet Yellen used the November 2023 QRA to rescue Treasurys from what might’ve otherwise been an unprecedented third consecutive annual decline.

Now Scott knows: Triple isn’t good enough in the context of “at least double.” Maybe quadrupling the size would’ve been sufficient to elicit the bull flattener he was after. Or maybe not. Maybe he needed to quintuple the long-end buyback to $10 billion. Or 6X that sucker. Who knows.

The important takeaway is that this is a problem Bessent and Trump created for themselves, first by not taking steps to address the fundamental concerns pushing up US yields, and then by upsizing buybacks between QRAs — i.e., by going off script to tip a change in debt management strategy outside the natural forum for announcing such shifts.

Bessent probably had an inkling that “triple” wasn’t enough on Wednesday, but if he’d gone any further, he ran the (not insignificant) risk of making Treasury’s debt management strategy seem even more ad hoc, to the further detriment of the “regular and predictable” doctrine he’s already upended.

Mercifully, Wednesday afternoon’s 10-year auction was strong, with a 1.4bps stop-through, a 2.71 bid/cover and non-dealer bidding of 95.7%, leaving dealers with just 4.3%, less than half the 9.2% average. Those results at least evidence decent demand from people who aren’t “The House” and aren’t affiliated with it.

Still, the mood was dour. “Today is a bad day for global bond markets,” former Goldman FX chief Robin Brooks said. “The problem with trying to artificially cap long-term yields with Treasury buybacks is that yields jump if markets think buybacks are too small.”

If this Hail Mary ahead of the mid-terms fails, the optics would be very bad for Bessent. But if yields are indeed higher from the belly on out the curve when Americans go to the polls in November — if “The House” loses, so to speak — we shouldn’t be surprised. After all, Scott works for a man who managed to bankrupt three casinos.