US long-term government bonds faced renewed selling pressure on Thursday, undermining Scott Bessent's attempt to stabilize the market. The Treasury secretary announced plans to at least double buyback operations for long-dated securities, but investors remain unconvinced. Long-dated Treasury yields have climbed sharply, complicating the US Treasury's task of refinancing $40tn in federal debt without triggering unsustainable budget deficits.

The Trump administration's federal budget assumes the Federal Reserve will cut rates and bond yields will rally, but market conditions are not aligning with these projections. Without strong economic growth or sustained inflation overshoots, higher yields mean higher borrowing costs and larger deficits.

Despite the intervention, the Treasury plans to issue a net $97bn of new 20- to 30-year bonds this quarter, down from a previous estimate of $103bn. The buyback operations, which initially targeted $2bn per quarter, will now increase, but the overall impact on net supply remains limited. Market participants appear skeptical that these measures will meaningfully shift sentiment.

Finance ministries worldwide face similar challenges when economic conditions make long-dated issuance unattractive, yet the US continues along its current path.