Economists at Wells Fargo have cautioned that the US Treasury's decision to at least double its long-dated bond repurchase program is essentially a high-stakes bet on falling short-term interest rates. Tom Porcelli and Michael Pugliese argue in a research note that given the unsustainable nature of current fiscal policy, funding this expanded buyback initiative will necessitate a greater reliance on issuing short-dated debt.

While short-end rates could indeed decline, the economists contend this outcome is contingent on inflation remaining sticky and expectations for the neutral rate continuing to trend upward. They highlighted the inherent risk of this strategy, stating that shortening the weighted average duration of Treasury debt is a precarious move when the budget deficit stands at 6% of GDP and interest costs are at historic highs.

The liquidity repurchase facility was not designed to act as a "duration support tool." Although the immediate market reaction might be positive, the economists suggest that investors may not view the move favorably in the long run.