---
title: "Wellington: The U.S. expansion of buybacks is a \"gamble\" that short-term interest rates will decline"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/296404744.md"
description: "Wells Fargo economists pointed out that the U.S. Treasury's expansion of short-term debt repurchases to address unsustainable fiscal policies and high interest costs is a \"gamble\" on lower short-term rates. This move aims to shorten the weighted average duration of government bonds, but it is predicated on inflation remaining sticky and neutral interest rate expectations rising. The research report warns that, in the context of a budget deficit accounting for 6% of GDP, this move is risky, and the market may not recognize its positive impact in the long run"
datetime: "2026-08-19T21:47:11.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/296404744.md)
  - [en](https://longbridge.com/en/news/296404744.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/296404744.md)
---

# Wellington: The U.S. expansion of buybacks is a "gamble" that short-term interest rates will decline

Fidelity economists Tom Porcelli and Michael Pugliese pointed out in their research report that, given the unsustainability of fiscal policy, the U.S. Treasury's decision to at least double the scale of long-term bond repurchases needs to shift towards increasing short-term debt issuance to fund it, which amounts to a "gamble" on lower short-term interest rates. Short-term interest rates may decline, but only if inflation remains sticky and expectations for neutral rates continue to rise. They wrote: "In other words, in a situation where the budget deficit accounts for 6% of GDP and interest costs are at historical highs, shortening the weighted average duration of Treasury bonds is a risky move." Liquidity repurchase tools are not intended to serve as "duration support tools," and while the subconscious reaction may be positive, the market may not view it this way in the long run

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