Treasury Turns to Interventionist Tactics to Lower Interest Rates

The Trump administration’s Treasury Department has become increasingly interventionist in its efforts to bend the forces of global markets to lower the cost of living in the United States, but it is finding that success does not come easily.

The assertiveness comes as the U.S. gross national debt topped $40 trillion on Wednesday, a milestone driven largely by growing interest payments to investors who hold government debt. High interest rates and elevated prices have combined to sour the views of voters on President Trump’s handling of the economy.

This week, Treasury Secretary Scott Bessent made a surprising move to calm the jittery bond market. He announced that the Treasury Department would be doubling the amount of government debt it is permitted to buy back from investors. The increase was intended to limit the rise of long-term government bond yields as a way to contain borrowing costs.

“Part of this is signaling and to show that we believe that yields don’t reflect the underlying fundamentals,” Mr. Bessent said in an interview with CNBC on Thursday.

Explaining that he is willing to expand the buyback program, Mr. Bessent argued that investors are misreading the market.

“We are trying to keep the market in equilibrium,” Mr. Bessent added.

Those yields — which represent what investors are demanding to be paid in order to buy bonds — spiked to their highest levels since 2007. The yields, which move inversely to bond prices, dipped after Mr. Bessent’s announcement on Wednesday. By Thursday, yields were again rising, underscoring the challenge of such interventions given the fundamental issues that are making bond investors jittery.