US bond buyback eases Treasury sell-off, but yields climb again
Why it matters: Investors see the larger buybacks as only short-term support while inflation, deficits and heavy borrowing keep pressure on long-term rates.
The US Treasury’s surprise move to double long-end bond buybacks to at least $4 billion per operation gave only brief relief to a stressed government debt market, with long-term yields rising again as investors focused on inflation and the expanding federal debt load. The intervention came after long-bond yields hit their highest level since 2007. Treasury Secretary Scott Bessent said the government could raise repurchase volumes again to support liquidity in a thinly traded part of the market, especially in August. But investors and fund managers including Wells Fargo Investment Institute and Principal Asset Management argued the program is too small to change the broader forces lifting yields, including fiscal deficits, monetary policy uncertainty and heavy corporate borrowing tied to AI infrastructure.