The U.S. Treasury periodically buys back unmatured marketable securities. Buybacks do not always occur on a regular pattern. With buybacks:
- Treasury has more flexibility in managing the public debt.
- Treasury can continue offering regular new securities in appropriate size and maturities. There is more control over the maturity structure of the outstanding debt.
- Treasury can absorb extra cash whenever revenues are greater than the immediate spending need, making them a good cash management tool.
- Treasury may be able to lower the government's interest expense by buying higher-yield debt and replacing it with lower-yield debt.
For rules on buybacks, see 31 CFR Part 375.