Fed flags rate-hike risk as Treasury buybacks fail to hold yields down
What's next: Treasury plans bigger long-bond buybacks from Sept. 9 to Nov. 4, but yields rebounded and some officials still lean hawkish.
Federal Reserve officials signaled that the Treasury Department’s debt-market intervention has not changed the central bank’s focus on inflation and jobs, even as longer-term yields briefly fell and then climbed again. St. Louis Fed President Alberto Musalem said financial conditions remain accommodative and indicated he could support a rate increase at the Sept. 15-16 meeting. San Francisco Fed President Mary Daly said long-dated bond moves do not yet offer a clear policy signal. The Treasury, led by Scott Bessent, will at least double buybacks of longer-term debt starting Sept. 9 through Nov. 4 while issuing more short-term bills. JPMorgan warned the strategy may only delay pressure from heavy government and corporate borrowing.