Greetings,

The Treasury Department's bold plan for bond buybacks is making waves across global markets, with some observers drawing parallels to the Federal Reserve's "Operation Twist." Some analysts warn the move could backfire if it fails to produce a sustained effect. More on that below.

Also in this edition:

• Consumers show resilience, adjust spending
• IRS updates guidance on qualified overtime deduction
• CFOs face state-level challenges with OBBBA conformity
• SEC charges former Tricolor CEO, CFO with fraud

The Treasury Department has announced it will double buybacks of long-term Treasury bonds in a move reminiscent of the Federal Reserve's "Operation Twist" in 2011. The surprise action aims to lower long-term yields, which have risen to levels not seen since 2007 amid a bond-market sell-off triggered by the US war on Iran. Treasury Secretary Scott Bessent has shifted to shorter-term debt to manage borrowing costs, but economists from Evercore have raised doubts about the effectiveness of the latest effort.

JPMorgan Chase strategists have expressed concerns about the US Treasury's decision to double bond buybacks to curb long-term borrowing costs, warning it might be seen as lacking credibility. JPMorgan says the move addresses symptoms, not the root cause, of the US running a 6% deficit amid full employment. The national debt has surpassed $40 trillion, raising concerns about long-term fiscal stability.

US consumers remain resilient despite financial pressures, with Walmart, Target and Home Depot reporting steady spending. However, consumers are increasingly selective, prioritizing value as they face high prices and slowing wage growth. Walmart has responded by lowering prices on more than 11,000 items, while Target has seen a surge in back-to-school sales. Economists predict a slowdown in consumer spending in the coming months, but not a significant decline.

Anthropic is preparing for an initial public offering that could match or surpass SpaceX's record $86.2 billion debut. Anthropic has seen revenue surge, with second-quarter revenue exceeding $11.5 billion and a run rate of $65 billion by July. The company, which recently raised $65 billion at a $965 billion valuation, is considering super-voting shares to give greater control to CEO Dario Amodei and other co-founders.

Texas CFOs are grappling with "shadow finance," a challenge arising from employees independently adopting artificial intelligence tools, as highlighted in recent CFO Alliance roundtables. Nick Araco Jr., CEO of CFO Alliance, notes concerns about unvetted AI systems creating errors and the gap between AI adoption and measurable returns. CFOs are drawing boundaries for AI use, such as not allowing AI to write directly into ERP systems, and emphasizing the importance of narrative integrity in financial reporting.

Fundraising for non-traded business development companies experienced a dramatic downturn in the second quarter of 2026, plummeting 82% to just $2 billion compared to $11 billion raised a year prior. This marked the lowest fundraising level since 2020 and significantly reduced the capital available for new loans across both private and publicly traded BDCs. The contraction in fundraising has tightened market liquidity and contributed to a shrinking portfolio for the largest public BDCs, as repayments have outpaced new loan originations for three consecutive quarters.

The IRS has updated its fact sheet on the overtime deduction under the One Big Beautiful Bill Act, clarifying limits and timing of the deduction and providing more information on Fair Labor Standards Act coverage. The deduction allows up to $12,500 of qualified overtime compensation per individual return, or $25,000 for joint filers, with a phaseout beginning at $150,000 in adjusted gross income.

CFOs are finding that the benefits of the One Big Beautiful Bill Act are not fully realized at the state level due to varying state conformity with federal tax legislation. While rolling conformity states automatically adopt federal changes, fixed-date states require legislative action, leading to significant differences in tax benefits. Companies are advised to track state conformity closely and maintain separate state calculations to manage compliance risks effectively.

The Securities and Exchange Commission has sued three former executives of Tricolor, including ex-CEO Daniel Chu, former CFO Jerome Kollar and former Senior Finance Director Ameryn Seibold, over an alleged scheme to double-pledge subprime auto loans, defrauding investors as the company raised $1.9 billion via asset-backed securities. The company went bankrupt in September last year.