Debt Buybacks Spark Yen-Style Dollar Debasement Fears, Economist Warns

A plan by Treasury head Scott Bessent to increase long-term debt buybacks has prompted economist Robin Brooks to warn it could trigger a yen-like devaluation of the dollar as deficits widen and yields swing, describing the move as “debasement” risk. Brooks argues such financial engineering shifts risk premia away from real fundamentals, while others (like Capital Economics) say its impact on the dollar is overstated and that yields may rise due to the large deficits and new debt. The debate centers on whether the buyback is a meaningful fix or a symbolic Band‑Aid in a stressed Treasury market.