JPMorgan Chase & Co. strategists warned that markets may view the US Treasury’s surprise effort to curb long‑term borrowing costs as lacking credibility, potentially pushing up the term premium and yields over time.

The Treasury announced it would at least double the size of its bond buybacks to provide greater liquidity support and lower long‑term yields. JPMorgan argued the move only treats symptoms, not the root cause: a 6% deficit in an economy near full employment.

While the program may lower yields in the short term, it does not address the structural fiscal imbalance. JPMorgan’s critique underscores that large Treasury purchases can be seen as a band‑aid, not a lasting solution to deficit pressures.

Investors will watch whether the Treasury can sustain the expanded buybacks and tackle underlying deficit issues, or whether the market will penalise the program with higher yields and a larger term premium.