U.S. Treasury Secretary's Buybacks Face Challenges Amid Rising Bond Yields
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U.S. Treasury Secretary Scott Bessent on Thursday indicated that his department could make additional moves in the wake of its announcement that it would at least double the size of its buybacks of longer-dated Treasury bonds.
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FortuneWednesday brought the latest surprise. Just two weeks after releasing its schedule for buying back older Treasury securities, the Treasury Department announced it would “at least double” its planned purchases of outstanding 10-year to 30-year debt.
Epoch Times BusinessFrom Sept. 9, the Treasury will double the size of its government debt repurchases to $4 billion, focusing its buyback operations on 10- to 20-year and 20- to 30-year bonds.
ZeroHedgeTraders are taking stock after Treasury Secretary Scott Bessent announced a surprise increase in long-term bond buybacks to stem a rise in yields that had taken them to a near two-decade high. When it comes to Bessent’s plan to increase buybacks of longer-dated debt, Vital Knowledge founder Adam Crisafulli says “the Treasury action is somewhat minor and insignificant compared to the powerful secular forces pushing yield higher,” and JPMorgan sees credibility risk from the action. And with many warning the plan may be a short-term fix given concerns about large fiscal deficits and oil-driven inflation, that has already been realized as yields rise above where they were before the intervention yesterday!
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So much for the brief calm in the U.S. bond market. Treasury Secretary Scott Bessent’s latest effort to control yields on long-dated U.S. bonds was short-circuited a day later as the U.S. national debt hit the $40 trillion mark and oil prices spiked as a result of the Iran war.
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ZeroHedgeMarket Snapshot Top Overnight News The US’s national debt has hit a record $40tn as borrowing rises at a historic pace, fuelling investor concerns about the state of America’s public finances despite Donald Trump’s vow to bring spending under control. FT Scott Bessent’s shock Treasury intervention reverberated through markets, with analysts warning his plan risks being a short-term “circuit breaker” at best. Underscoring jitters, long end US yields edged higher. Bessent is emerging as the most interventionist Treasury chief in decades. BBG The US will begin what Donald Trump called “unprecedented” economic warfare against Iran after failing to reach a deal. He gave no details but also threatened to target Iran’s trading partners. Brent rose above $93.
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The US Treasury is buying long bonds, but not very many Speaking loudly but wielding a teeny-tiny stick in
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RealClearMarketsThe US Treasury is buying long bonds but not very many. Read Full Article »
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With a slew of unexpected maneuvers this year, Scott Bessent has emerged as the most interventionist Treasury secretary in financial markets in decades — putting his credibility on the line in an effort to quell a potentially damaging rise in US borrowing costs.
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Financial TimesWhat is Bessent doing with the $32tn Treasury market — and will it work? US Treasury secretary has made a high-stakes bet he can beat back soaring borrowing costs
MarketWatchTreasury Secretary Scott Bessent’s plan to calm markets is being short-circuited
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Under Chairman Kevin Warsh, the Federal Reserve has pulled back on forward guidance, meaning the central bank will not signal to financial markets which policy decisions it plans to make. The objective behind this thinking is to allow the financial markets to move without handholding by the Fed.
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FortuneThe Treasury’s move comes just weeks after Fed Chairman Kevin Warsh had enthused over financial markets being freed of forward guidance. “Market participants are learning to play the ball, not the referee, and market prices will continue to respond in the direction and magnitude they see fit.”
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Experts say that bond yields have been spiking to highs not seen since the start of the Great Recession due to investor anxiety over a number of factors, including inflation, the size of the US government's debt, and Trump's illegal war with Iran.
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Epoch Times BusinessA broad array of factors has pushed up yields, including persistent war-driven inflation fears, fiscal worries, potential monetary policy tightening, and competition from artificial intelligence-related corporate bonds.
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Audio will be available later today. NPR's Leila Fadel speaks with Bloomberg's Stacey Vanek Smith about why the U.S. Treasury acted to push down long-term bond yields and how that relates to the ballooning U.S. debt.
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Epoch Times BusinessYields on long-term U.S. bonds fell midweek after the Treasury Department said it would expand long-end debt buybacks amid climbing rates.
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Independent claims that didn't surface elsewhere in our corpus. Treat as supplementary — not corroborated across outlets.
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01 ZeroHedge US futures slide and are trading at session lows, as bond yields surge after yesterday’s Treasury announcement, having now erased the entire post buyback-boost move; yields are 4-5bps higher as the curve bear steepens sharply with the 10Y yield now at 4.69%, above where it was before the Treasury's press release yesterday, driven by a surge in Brent above $94 after Trump vowed to unleash an "Economic D-Day" on Iran's economy. As of 8:00am ET, S&P futures are down 0.2% and Nasdaq futures slide 0.3%. Pre-mkt, Memory / Semis are leading the Tech tape after a stronger APAC Tech session; Mag7 / Software are lagging. Cyclicals are seeing broad-based strength. Defensives are lagging with HC seeing profit-taking.
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02 Fortune That came after the Treasury earlier this month opened the door to potential cuts in issuance of longer-dated debt. On July 31, Bessent oversaw the first purchases of yen by US authorities in three decades, an action seen as reducing the need for Japan to sell down its Treasuries stockpile to fund its own yen buying. And early this year, Bessent deployed so-called rate checks — calls by authorities to banks for quotes on the yen — surprising even a former Japanese official.
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03 Financial Times Scott Bessent takes on bond vigilantes in $32tn Treasury market Wall Street investors say move to buy more long-term US debt is a ‘band-aid on a bullet hole’
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04 Common Dreams 5 #000000 #FFFFFF "Trump is going to pump billions of dollars into the bond market to push down interest rates through the election, then let everything fall apart again," said one critic.
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05 Epoch Times Business A Treasury buyback is when the federal government purchases its own bonds before they mature, retiring older securities and replacing them with new issuance.
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06 MarketWatch Market Extra U.S. bond yields are already surging again a day after Bessent’s debt-buyback plan
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