US Treasury doubles debt buyback to steady bond market as 10-year yield hits 20-year high

Published Aug 19, 02:57 PM UTC

The US Treasury announced it is doubling its buyback of government debt to provide liquidity support to the long-term bond market, as yields on 10-, 20-, and 30-year Treasury notes hit 20-year highs. The move comes amid persistent inflation (3.4% in July) and division within the Federal Reserve over whether to raise interest rates. Three Fed voting members favored a rate hike, while the majority kept rates at 3.5%-3.75%. The bond market turmoil is exacerbated by the expiration of a US-Iran ceasefire and President Trump's threats against Oman, contributing to elevated oil prices. Gas prices reached $4.08 per gallon, the highest ever for August. Despite rising prices, the S&P 500 closed at a record high, driven by AI investment. The Treasury's announcement temporarily lowered yields and boosted stock markets.