Former Treasury Secretary Paulson: Contingency plan for a U.S. debt crisis must be prepared in advance; consequences will be very severe

Former U.S. Treasury Secretary Henry Paulson urged U.S. authorities to draw up contingency plans to address a potential collapse in demand for U.S. national debt when he was interviewed by Bloomberg on April 17, 2026 (Thursday). He said that once a crisis erupts, the consequences would be extremely severe. On the same day, the U.S. Department of the Treasury completed the largest debt buyback in a single transaction in history, accepting approximately $15 billion in old bonds maturing from 2026 to 2028.

Paulson Bloomberg Interview Statement

According to Bloomberg’s interview report dated April 17, 2026, Paulson said: “We need an emergency, targeted, short-term contingency plan, put on the shelf, so that when we run into trouble, we can activate it immediately.”

Paulson added in the same interview: “People will ask, when are you going to hit a bottleneck? I don’t know, it’s not possible. But when we hit a bottleneck, it will be very bad, so we have to be prepared for that.”

U.S. National Debt Market Snapshot Data

According to USDebtClock data, the size of U.S. national debt is currently close to $40 trillion, and the yield on 10-year Treasury notes stands at 4.3%. Bloomberg reports that if the Treasury encounters financing difficulties, there is discussion that the Federal Reserve (Fed) could become the main buyer of Treasuries.

According to Tether’s transparency report, in the total reserves of Tether, the world’s largest stablecoin issuer, 63% are made up of U.S. national debt, 10% are made up of overnight reverse repurchase agreement transactions, and together they hold more than $120 billion in U.S. national debt. Andri Fauzan Adziima, Head of Research at Bitrue, in an interview with Cointelegraph, listed the potential volatility in the U.S. national debt market as a “macroeconomic tail risk that needs attention.”

U.S. Treasury Completes $15 Billion Largest-Scale Debt Buyback

According to a Treasury announcement, on April 17, 2026 (Thursday) the U.S. Department of the Treasury completed the largest debt buyback in a single transaction in history, accepting approximately $15 billion in old bonds maturing from 2026 to 2028. Such buyback operations enhance overall liquidity in the Treasury market by canceling less liquid older bonds.

Frequently Asked Questions

When and on which media platform did Paulson issue a warning about the U.S. national debt market?

According to a Bloomberg report, on April 17, 2026 (Thursday), former U.S. Treasury Secretary Henry Paulson issued a warning about a potential collapse in demand for U.S. national debt during an interview with Bloomberg and urged authorities to prepare contingency plans in advance.

What details are involved in the largest-scale debt buyback completed by the U.S. Treasury on Thursday?

According to the Treasury announcement, on April 17, 2026, the U.S. Department of the Treasury completed the largest debt buyback in a single transaction in history, accepting approximately $15 billion in old bonds maturing from 2026 to 2028. The purpose of these operations is to enhance liquidity in the Treasury market.

What proportion of Tether’s reserves is made up of U.S. national debt?

According to Tether’s transparency report, 63% of Tether’s total reserves are made up of U.S. national debt, 10% are made up of overnight reverse repurchase agreement transactions, and together they hold more than $120 billion in U.S. national debt.