Treasury announces upscaled buyback operation for longer-term debt, sending yields lower
The move aims to restore liquidity in the 10-year to 30-year market as long-term yields hit their highest levels in years, Treasury said.
- On Wednesday, The Treasury Department announced plans to more than double its buyback operations, raising the maximum size from $2 billion to at least $4 billion for 10- to 20-year and 20- to 30-year sectors.
- Treasury targeted these long-dated nominal sectors following a buyers' strike that began in late June, which combined with inflation concerns and expanding government debt to push yields to nearly 20-year highs on Tuesday.
- Markets reacted sharply to the announcement, with the benchmark 10-year note yield falling 6 basis points to 4.647% and the 30-year bond tumbling 9 basis points to 5.196%.
- This intervention comes as the national debt climbed to $39.9 trillion, with annual interest payments projected to exceed $1 trillion this year, consuming about 19% of federal revenue according to the Peter G. Peterson Foundation.
- Projections from the Bipartisan Policy Center indicate the government could reach the $41.1 trillion statutory limit by 2027, prompting Senate Majority Leader John Thune to warn of an "ever looming Debt Ceiling disaster.
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The Treasury Department took a surprise step Wednesday after bond yields reached their highest levels in nearly two…
Bond market takes a breather after surprise move by Treasury Department
The Treasury Department made a surprise move Wednesday after bond yields hit their highest levels in almost two decades, doubling its planned purchases of longer-term bonds and easing pressure on the market.
The New York stock market opened higher as Treasury yields plummeted following the U.S. Treasury Department's expansion of its medium- and long-term bond buybacks. Investor sentiment appears to have improved somewhat as medium- and long-term bond yields, which had been on an upward trend due to recent concerns over fiscal deficits and inflation, responded to the Treasury Department's market stabilization measures. As of 9:37 a.m. on the 19th (lo…
The yield of 30-year US government bonds at times reached the highest level in 20 years. The Treasury now wants to double the buybacks, which makes it easier.
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