Citadel Securities warns Treasury buybacks could weaken dollar, fuel inflation

Citadel Securities warned that an expanded US Treasury buyback program could weaken the dollar and fuel inflation while doing little to resolve the country’s large fiscal deficit. The firm described the policy as "financial repression" and said Treasury market intervention alone would not ease fiscal and inflation pressures. Treasury Secretary Scott Bessent is increasing buybacks to lower long-term Treasury yields, but Citadel Securities said using Treasury cash holdings and other resources for larger bond purchases could add pressure on the dollar and inflation. It said lasting rate stability may require fiscal tightening and, if necessary, interest-rate increases by the Federal Reserve.

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