Democratic U.S. Senator Elizabeth Warren has raised a series of questions with Treasury Secretary Scott Bessent regarding what she describes as "unprecedented and chaotic" intervention in the U.S. Treasury market.

Warren, the senior Democratic member of the Senate Banking Committee, asked in an October 7 letter to Bessent whether the Treasury Department plans to reduce its cash reserves to fund Treasury buybacks.

She also pressed for details on what other measures the Treasury is taking to push down long-term U.S. Treasury yields, and demanded that Bessent respond by October 21.

Bessent had previously expanded the Treasury buyback program, catching market participants off guard.

The decision was announced on August 19, just two weeks after the Treasury published its quarterly debt management plan.

Warren said the government's recent approach is undermining the Treasury's long-standing commitment to a "regular and predictable" principle in its debt issuance strategy.

Bessent took these actions after long-term borrowing costs rose to their highest level since the early 2000s.

This round of yield increases was largely driven by inflationary pressures triggered by the war with Iran.

Despite the Treasury's expanded buyback operations, the benchmark 10-year U.S. Treasury yield continued to climb, touching its highest level since 2002 this week.

"The surge in U.S. Treasury yields was self-inflicted," Warren wrote in the letter, referring to the U.S.-Iran war.

"Rather than advising the President on how to reduce costs, the choice was made to launch an unprecedented and chaotic intervention in the market, clearly in the hope of containing the resulting damage."

Bessent has previously said that the U.S. government's efforts to economically isolate Iran will end the threat posed by the regime, and that once the conflict ends, energy prices will fall, which in turn will bring down borrowing costs.

He also said that faster economic growth and the fiscal consolidation plan he is advancing will help ease the government's borrowing burden.

Warren also asked Bessent whether the Treasury has assessed the impact of higher Treasury yields on consumer borrowing rates such as auto loans and home mortgages.

She further pressed on whether the Treasury would use Treasury General Account (TGA) funds to expand the scale of Treasury buybacks.

The U.S. Treasury has not yet clearly stated whether it is prepared to continue reducing its cash reserves.

Market participants had initially expected Treasury officials to expand short-term Treasury bill issuance to raise funds for purchasing longer-dated government bonds.