US Treasury triples long-dated bond buyback to $60B as 30-year yield nears 2007 highs
The US Treasury announced it will buy up to $60 billion in longer-term government bonds on Thursday, tripling the initial $20 billion limit announced in early August, as the 30-year yield approached 5.4%, its highest since 2007. Treasury Secretary Bessent defended the expanded buyback as a response to market prices deviating from equilibrium. The Institute of International Finance warned such financial engineering cannot address structural debt drivers. A previous $60 billion operation on September 10 purchased only about $5.2 billion due to insufficient competitive bids.
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US Treasury Triples Long-Dated Bond Buyback to $60B as 30-Year Yield Hits 2007 High
The US Treasury announced it will buy up to $60 billion in longer-term government bonds on Thursday, tripling the $20 billion initially communicated in early August under Treasury Secretary Scott Bessent's expanded repurchase program. The move aims to curb rising borrowing costs, with the 30-year yield reaching 5.38% intraday, near its highest since 2007. The original plan was abandoned on August 19 when the Treasury said it would 'at least double' the size. Critics, including the Institute of International Finance (IIF), argue such 'financial engineering' interventions provide only temporary relief and do not address structural debt dynamics. Bessent defended the decision, stating he acted when markets 'deviated' from equilibrium prices. The previous $60 billion buyback on September 9 only purchased about $5.2 billion due to a lack of competitive bids. The yield rise is attributed to energy cost increases following the US-Iran war since late February, which also reversed Fed policy expectations, leading to a rate hike by Chair Kevin Walsh last week.
Read sourceUS Treasury Plans Second $60B Long-Term Bond Buyback as Yields Near 2007 Highs
The US Treasury announced a second round of increased long-term bond buybacks, targeting up to $60 billion in 20- to 30-year Treasury bonds, with operations scheduled for September 24. This follows a first round on September 10 that only purchased $52 billion of the $60 billion target due to insufficient competitive bids from holders. The 30-year Treasury yield has climbed toward 5.4%, approaching levels not seen since 2007, driven by rising energy costs following US-Israel military action against Iran and the Federal Reserve's recent 25-basis-point rate hike. Treasury Secretary Bessent defended the expanded buyback program as a response to market prices 'deviating from equilibrium,' noting the 30-year yield rose only about 1 basis point since the plan was announced. However, the Institute of International Finance (IIF) warned that such 'financial engineering' cannot address the structural factors behind rising US debt. Market attention now focuses on whether the Treasury can fully execute the $60 billion buyback given the previous shortfall.
US Treasury expands bond buyback to $6B, Bessent defends move as market doubts persist
On September 23, the US Treasury announced it will buy back up to $6 billion in longer-dated government bonds on Thursday, tripling the initial $2 billion limit announced in early August. This is the first operation under Treasury Secretary Bessent's expanded buyback plan, aimed at curbing rising borrowing costs. The original plan was canceled on August 19 in an unexpected announcement, when the Treasury said it would 'at least double' the operation size. Following the announcement, 20- to 30-year Treasury bonds targeted for Thursday's buyback continued to decline, with the 30-year yield briefly rising to 5.38%, near the month's high of about 5.40% and the highest since 2007. Bessent defended the expansion, arguing that market prices were 'deviating' from equilibrium levels. However, the Institute of International Finance (IIF) warned on Wednesday that such 'financial engineering' cannot address underlying debt dynamics, and that intervention measures like secondary-market purchases may provide temporary relief but cannot resolve the structural factors driving debt growth.
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US Treasury Expands Bond Buyback Program to $60 Billion Amid Market Skepticism
The US Treasury announced on September 23 that it will buy back up to $60 billion in longer-term government bonds on Thursday, tripling the initial $20 billion limit announced in August. This is the first operation under Treasury Secretary Bessent's expanded buyback plan, aimed at curbing recent rising borrowing costs. The original plan was canceled on August 19 in a surprise announcement, when the Treasury said it would at least double the operation size. Following the announcement, 20- to 30-year Treasury bonds extended losses, with the 30-year yield briefly hitting 5.38%, near its highest since 2007. Critics argue the move amounts to market intervention that cannot address fundamental fiscal challenges. Bessent defended the expansion, stating he acted because market prices were 'deviating' from equilibrium levels. The Institute of International Finance (IIF) warned on Wednesday that such 'financial engineering' cannot resolve underlying debt dynamics, and that secondary market purchases may provide temporary relief but cannot address structural factors driving debt growth.
Read sourceUS Treasury Plans Up to $6B in Long-Dated Bond Buybacks as 30-Year Yield Nears 2007 Highs
The US Treasury announced a second round of expanded long-term bond buybacks, aiming to purchase up to $6 billion in 20- to 30-year Treasury bonds on September 24, 2024, to curb rising borrowing costs. This follows a September 10 operation that fell short of its $6 billion target, buying only $5.2 billion due to insufficient competitive bids. Despite the intervention, 30-year Treasury yields approached 5.39%, near 2007 highs, driven by energy cost increases since late February and the Federal Reserve's September rate hike of 25 basis points, with most officials projecting another hike this year. Treasury Secretary Bessent defended the expanded buybacks as a correction for 'deviated' market prices, noting only a 1 basis point rise in 30-year yields since the plan's announcement. However, the Institute of International Finance warned that such 'financial engineering' cannot resolve structural debt issues. Market focus is on whether Thursday's operation will fully utilize its $6 billion limit.
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