US Treasury triples long-dated bond buyback to $60B as 30-year yield hits 2007 high
The US Treasury announced a second round of expanded long-term bond buybacks, targeting up to $60 billion in 20- to 30-year Treasury bonds on September 24, 2024, to curb rising borrowing costs. The 30-year yield reached 5.38%, the highest since 2007. Treasury Secretary Bessent defended the move as a correction for market prices deviating from equilibrium, while the Institute of International Finance warned such financial engineering cannot resolve structural debt issues.
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US Treasury Plans Up to $60B Long-Dated Bond Buyback; 30-Year Yield Hits 2007 High
The US Treasury announced a second round of expanded long-term bond buybacks, targeting up to $60 billion in 20- to 30-year maturities, to curb rising borrowing costs. The operation follows a September 10 buyback that fell short of its $60 billion target due to insufficient competitive bids. Despite the announcement, 30-year Treasury yields surged above 5.41%, reaching their highest since 2007, driven by energy cost increases following military action against Iran and the Federal Reserve's recent 25-basis-point rate hike. Treasury Secretary Bessent defended the buybacks as a correction for market prices 'deviating from equilibrium,' but the Institute of International Finance (IIF) warned that such 'financial engineering' cannot resolve the structural factors behind rising US debt. Market focus now shifts to whether Thursday's operation will attract enough sellers to fully execute the $60 billion limit, which will serve as a key test of the buyback tool's effectiveness.
Read sourceUS Treasury Triples Long-Term Bond Buyback to $60B; 30-Year Yield Hits 2007 Highs
The US Treasury announced it will purchase up to $60 billion in long-term government bonds on Thursday, tripling the $20 billion initially communicated in early August. This is the first operation under Treasury Secretary Scott Bessent's expanded buyback program, aimed at curbing rising borrowing costs. The 30-year Treasury yield touched 5.38% on Wednesday, near its 2007 peak of 5.40%, driven by energy cost increases following the US-Iran war since late February. The conflict has also reversed Federal Reserve policy, with Chair Kevin Walsh raising the overnight rate for the first time since 2023 to curb price pressures. Bessent defended the move against criticism of market intervention, stating he acted when the market 'deviated' from equilibrium. The Institute of International Finance warned that such 'financial engineering' cannot resolve structural debt drivers. In a prior expanded operation on September 9, the Treasury bought only $5.2 billion of the $6 billion maximum due to a lack of competitive bids.
Read sourceUS Treasury Triples Long-Dated Bond Buyback to $60B as 30-Year Yield Hits 2007 High
The U.S. Treasury announced it will purchase up to $60 billion in longer-term government bonds on Thursday, tripling the $20 billion initially communicated to investors in early August. This is the first operation under Treasury Secretary Scott Bessent's expanded buyback program, aimed at curbing recent borrowing cost increases. The 30-year Treasury yield touched 5.38% intraday on Wednesday, approaching the 5.40% peak seen earlier this month, the highest since 2007. Yields have been driven higher by rising energy costs following the outbreak of war between the U.S. and Iran in late February, which has also reversed Federal Reserve monetary policy expectations. Fed Chair Kevin Walsh raised the overnight interest rate last week for the first time since 2023 to combat price pressures. Bessent defended the expanded buyback against criticism that it amounts to market intervention that does not address fundamental fiscal challenges, stating he acted when the market 'deviated' from equilibrium prices. The Institute of International Finance warned that such 'financial engineering' may provide temporary relief but cannot resolve the structural drivers of rising debt. In a previous expanded operation on September 9, the Treasury bought only about $5.2 billion of the $6 billion maximum due to a lack of 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.
Read sourceUS 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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