US Department of the Treasury

The United States takes its turn chairing the G20 finance track this week under distinctly awkward conditions.

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US Treasury Secretary Scott Bessent and Federal Reserve Chair Kevin Warsh are hosting counterparts in the North Carolina mountains, following a deputies meeting held over the weekend, with the formal agenda covering economic growth, global imbalances, sovereign debt restructuring, banking regulation and energy security.

Asheville was chosen deliberately.

The city was devastated by Hurricane Helene in September 2024, a storm that killed more than 250 people and caused close to $80 billion (€69bn) in damage from Florida to the Carolinas, and Bessent has cited its rebuilding as a fitting backdrop for talks about economic growth.

“We want the rest of the world to come along with our growth agenda, whether it’s deregulation, the energy independence […]” he said, adding that “the world has this mountain of debt, and we do have to grow our way out of it,” confirming public debt will feature prominently in the discussions.

The setting may prove easier than the substance.

Trade friction between the US and Canada escalated after negotiations broke down, hostilities with Iran have resumed through economic rather than military means, and Warsh arrives days after a hawkish first Jackson Hole address that sharply raised the odds of a US rate rise this month.

Both meetings serve as groundwork for the leaders’ summit at Trump National Doral in Miami on 14 and 15 December, and come weeks before Xi Jinping is expected in Washington on 24 September.

Bessent’s push on Iran

The US Treasury Secretary intends to use bilateral meetings to build support for squeezing Tehran, and stated that Washington will sanction another bank this week, though he declined to name it.

“This is going to be financial violence if we have to,” Bessent told AP.

“We are showing people that we know who you are, you know who you are, and this has got to stop,” he added.

The campaign’s opening move came on Friday, when the US Treasury proposed a rule that would cut the Emirati branches of Banque Misr, Egypt’s second-largest lender, off from the American financial system.

By stopping short of full sanctions, the US administration appeared to signal reluctance to punish major trading partners that still deal with Iran, notably China and India.

On Beijing specifically, Bessent said “all options are on the table” over its continued oil purchases, while dismissing suggestions of hesitancy as “a completely false narrative that the media picked up on.”

The meetings are also being held under unusual media restrictions, after the US Treasury barred certain reporters from the New York Times, Wall Street Journal and Bloomberg from covering them.

The New York Times called the move “not just another disturbing effort by the administration to undermine independent journalism, but a blatant attempt to evade public scrutiny.”

The department has not explained its decision, though Bessent told the AP that “it has nothing to do with point of view.”

Who speaks for Europe at the G20

The EU is represented by Ireland’s Tánaiste and Finance Minister Simon Harris, who holds the role by virtue of Ireland’s EU presidency since 1 July, alongside ECB President Christine Lagarde and Economy Commissioner Valdis Dombrovskis.

Harris said he was looking forward to “the first Ministerial meeting of the G20 Finance Ministers and Central Bank Governors since Ireland assumed the Presidency of the EU,” describing the forum as a place where the largest economies “can exchange views and work towards international economic and financial stability.”

The Irish minister’s stated priority reflects the conflict shaping much of the agenda at this G20 meeting.

Among the EU’s concerns, Harris listed “energy security and ensuring we have secure and resilient energy supplies at a time of severe volatility caused by the conflict in the Middle East.”

He will also hold bilateral meetings with counterparts from G20 member states as Ireland has also been invited as a guest for the December leaders’ summit in Miami.

Additional sources • AP

Published on
20/08/2026 – 11:18 GMT+2

The US national debt now stands at a record $40 trillion (€34.4tn), while the Treasury has responded to the bond market pressure by pledging to buy back far more of its own older securities.

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Washington’s two announcements landed on the same day and represent two symptoms of the same underlying strain: a government borrowing at a record pace just as buyers of its longest-dated debt are demanding higher returns to keep lending.

Buybacks work like a targeted repurchase. Rather than printing new money, the US Treasury uses cash it already has to repurchase older, harder-to-trade bonds from investors, improving liquidity without changing the total stock of debt.

From 9 September, the maximum size of each buyback operation in the 10-to-20-year and 20-to-30-year markets will at least double, from $2 billion (€1.7bn) to $4 billion (€3.4bn), running through the next quarterly refunding on 4 November.

The US Treasury said the change reflects “strong sponsorship from market participants” in that part of the curve, but the timing of the decision was no accident.

The 30-year yield had climbed on Tuesday to its highest level since 2007 amid what analysts called a buyers’ strike stretching back to late June, aggravated by a swelling supply of corporate debt tied to AI data centre spending.

Yields duly fell after Wednesday’s announcement, with the 30-year dropping roughly 9 basis points and the 10-year around 6, and Wall Street rallied.

Asked whether Americans should worry about the volatility, US President Donald Trump simply said: “No, I don’t think so.”

However, not everyone is convinced the fix goes deep enough.

The size of the increase is modest next to the $32 trillion (€27.5tn) Treasury market it is meant to steady, and notable economist Mohamed El-Erian suggested the outsized market reaction reflected hopes of broader intervention to come rather than the direct effect of the buybacks themselves.

Thomas Simons, chief US economist at Jefferies, said the announcement broke with Treasury’s usual pattern of steady, well-flagged communication about its borrowing plans and felt “shot from the hip”.

How the US national debt reached $40 trillion

The debt figure, confirmed by US Treasury data covering Tuesday, splits into $32.27 trillion (€27.75tn) held by the public and $7.78 trillion (€6.69tn) owed between government accounts.

It arrived roughly two fiscal years earlier than expected as the US Congressional Budget Office projected in May 2023 that the threshold would not be crossed until 2028, and it came remarkably fast even by recent standards: $39 trillion (€33.5tn) was reached only in March, $38 trillion (€32.6tn) the previous October.

The US government borrowed $1.8 trillion (€1.5tn) in the first ten months of this fiscal year alone, already more than it borrowed in the whole of the last one, as spending on Social Security, Medicare, defence and interest payments continues to outrun revenue.

“The national debt is not just a number on the government’s balance sheet,” said David Young, president of the Conference Board’s CEO Center, noting it shapes the financial decisions Americans make daily.

The two stories feed each other.

A bigger debt load makes investors warier about lending long-term, which pushes yields higher. In turn, higher yields then raise the government’s own interest bill, adding further to the debt the US Treasury has to finance next.

Wednesday’s buyback expansion may ease the immediate pressure, but it does nothing to slow the borrowing driving it.

Published on
17/08/2026 – 11:40 GMT+2

Two pieces of data collided in Tokyo within hours of each other.

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Bond investors pushed the 10-year Japanese government bond yield to a three-decade high before the government reported that growth had come in at barely half the pace economists had forecast, a pairing that says a great deal about what is really driving Japan’s markets right now.

The economy expanded at an annualised rate of 1.1% in the second quarter, Cabinet Office data showed, well below the 2.0% forecast and down from a downwardly revised 1.9% pace in the first quarter.

Quarter on quarter, GDP rose just 0.3% against a forecast of 0.5%, marking a third consecutive expansion. Private consumption was flat, and capital expenditure fell 1.2%, while net exports, helped by the weak yen, added 0.5 percentage points to growth.

The 10-year JGB yield touched 2.93% earlier in the day, its highest level since September 1996, before easing slightly once the GDP figures landed.

The gap between weak growth and rising bond yields helps explain what is moving Japanese bonds now: not growth, but inflation and the currency.

The GDP deflator rose 2.6% year on year, and traders are increasingly betting that the Bank of Japan will raise its policy rate, currently at 1% and already a three-decade high, as soon as September to contain inflation and support the yen.

Tokyo and Washington spent billions defending the yen

The yen slid to 163.73 per US dollar in late July, its weakest level in roughly four decades, prompting Japan and the US to carry out their first joint currency intervention since 2011.

Japan deployed an estimated $85 billion (€73.3bn) in the first two days alone, while the US intervention was much smaller, according to Goldman Sachs.

The operation pushed the yen back to around 159 per US dollar.

There is currently a wide gap between Japanese and US interest rates, with the Federal Reserve’s benchmark rate still at 3.50% to 3.75%. The Bank of Japan’s September meeting is being watched as the next test of whether the currency’s recovery can hold.

Japan’s bond market matters well beyond Tokyo because of the yen carry trade, in which investors borrow cheaply in yen to fund purchases of higher-yielding assets abroad, from US Treasuries to emerging-market debt.

Rising Japanese yields erode that trade’s profitability and can force rapid unwinding, as it happened in August 2024, when a Bank of Japan rate rise combined with weak US jobs data sent the Nikkei down more than 12% in a single session and knocked roughly 3% off the S&P 500.

With JGB yields at three-decade highs and further tightening still expected, analysts say the conditions for a similar shock have not disappeared.