US Stock Market: Treasury Steps in to Curb Rising Long-Duration Bond Yields
The move briefly steadied the bond market, but analysts said inflation and U.S. debt levels still point to higher borrowing costs.
- On Wednesday, The Treasury doubled long-end buybacks to at least US$4 billion per operation to address long-bond yields hitting their highest level since 2007.
- Worldwide borrowing costs have surged as governments fund defense, aging populations, and COVID-19 responses, while U.S. debt has surpassed US$40 trillion since Donald Trump was first sworn in as president in 2017.
- Despite the intervention, longer-dated yields rose again on Thursday to 5.23 per cent, edging back toward Tuesday's 19-year high of 5.34 per cent.
- Mohit Kumar, chief European economist at Jefferies, said the announcement signals Treasury Secretary Scott Bessent is monitoring long-end yields, though operations remain limited in size.
- The dollar fell almost 1 per cent on Wednesday, raising questions among Investors about whether the Fed or The Treasury now wields greater influence over general credit conditions.
14 Articles
14 Articles
The US Treasury seeks to support the liquidity of the bond market by buying more long-term debt, in order to reduce yields ...
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US Treasury Department steps in amid bond rout: will it work?
With elevated US Treasury yields fuelling concerns about Washington’s fiscal sustainability, the country’s Treasury Department stepped in on Wednesday, announcing plans to at least double the size of some long-end bond buy-backs. As markets weigh whether this move could turn the tide, we look at how the buy-backs work, how durable they could be in reining in yields and what they could mean for global asset allocation. What is the US Treasury Dep…
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