Treasury Department to buy back up to $6 billion in longer-term debt, triple the normal level
The operation triples the usual size as the 10-year Treasury yield hits its highest level since November 2023, officials said.
- Treasury yields climbed on Wednesday despite Treasury Secretary Scott Bessent announcing the department will buy back $6 billion of longer-dated government debt, triple the usual amount. The 10-year Treasury note hit its highest level since November 2023.
- These expanded buybacks respond to reduced foreign government purchases and a national debt that recently surpassed $40 trillion, with the Treasury planning to use the $1 trillion General Account to fund the strategy.
- Bessent argued the U.S. can grow out of debt with 3% yearly growth, working with Director of the Office Management and Budget Russ Vought on a fiscal consolidation plan. He stated, "We don't have a revenue problem. We have a spending problem."
- Yields rose following market unease about operational effectiveness. Legendary investor Stanley Druckenmiller wrote that buyback operations must grow to survive tests of resolve, while Bessent dismissed the rise as driven by the "financial press" and told Breitbart he wanted things to become "more fact-based."
- Official foreign institutions now hold about 12% of outstanding U.S. Treasury securities, down from roughly 40% after the 2008 financial crisis, yet Bessent remains optimistic about the economy, citing the AI boom and new manufacturing plants.
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10-year Treasury yields hit multiyear high after buyback increase
The yield on the 10-year U.S. Treasury bond hit a three-year high on Wednesday, after the Treasury Department unveiled plans to triple how much government debt it can buy back. The 10-year bond yield was up more than 2 basis points to more than 4.83 percent, after peaking at more than 4.85 percent earlier in…
The U.S. Treasury Department is further increasing its government bond purchase program. Secretary Scott Bessent announced today that the program will be raised to $6 billion, after he already decided last month to go from $2 billion to $4 billion.
The North American bonds of various maturity continued to see increases in the yields despite the announcement by Scott Bessent that after all the amount of buybacks of long-term bonds would be six billion dollars, the triple of the usual. Markets pointed to values in the house of eight to 10 billion.
US Treasury tripled its bond buyback to $6 billion. So why are yields still rising?
The US Treasury has unveiled a bigger-than-expected $6 billion buyback of longer-dated government debt, but the move has yet to calm bond markets, with the 10-year yield climbing to 4.85% as investors weigh the limits of Washington’s intervention.
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