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Bessent's Bond Buyback Backfires, Yields Hit 3-Year High
Yields on 2-year Treasury notes jumped 16 basis points as traders questioned the Treasury’s buyback effort and inflation worries intensified.
- On Thursday, Treasury Secretary Scott Bessent's expanded bond buyback operation underwhelmed investors as the Treasury Department purchased just $5.19 billion of 10- to 20-year debt, falling short of the $6 billion maximum announced.
- Deteriorating conditions in the Middle East drove Brent oil to a four-month high, fueling inflation fears that steadily pushed bond yields higher. Rising energy costs compounded Treasury's struggle to stabilize the market amid broader debt concerns.
- Although the Treasury Department received $10.5 billion of offers on Thursday, officials remained highly selective in purchasing. Elias Haddad, head of global markets strategy at BBH, said Treasury was "bringing a toy gun to a tank battle."
- Traders wagered the Federal Reserve may raise interest rates at its Sep 15-16 meeting, accelerating the bond market sell-off. Two-year Treasury yields jumped 16 basis points to 4.59 per cent, the biggest one-day rise since April 2025.
- Investors are now testing Bessent's commitment by pushing yields higher, with Ben Emons of Highline Asset Management suggesting the Treasury Department might rely more heavily on shorter-dated debt to finance the deficit.
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BizToc
BizTocTreasury yields surge after Bessent’s beefed-up buyback operation fails to calm market
The Treasury market’s painful rout intensified Thursday, after an underwhelming auction of 30-year U.S. government debt and Treasury Secretary Scott Bessent’s first beefed-up buyback operation.
·New York, United States
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U.S. long-term Treasury yields and international oil prices are once again surging in tandem, putting pressure on financial markets.
Coverage Details
Total News Sources15
Leaning Left0Leaning Right3Center2Last UpdatedBias Distribution60% Right
Bias Distribution
- 60% of the sources lean Right
60% Right
C 40%
R 60%
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