US Treasury Boosts Bond Buybacks Spark Long-End Debt Rally
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US Treasury Boosts Bond Buybacks, Sparking Long-End Debt Rally The US government’s longest-dated bonds rallied sharply after the Treasury Department announced it would at least double the size of buybacks in the sector.
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CNBCCNBC's Jim Cramer said Wednesday that the Treasury's expanded bond buybacks may ease pressure on markets for now, but the unusual intervention underscores the strain in the government debt market. "I think people want this [stock market] rally preserved in the worst way, and some would say they're doing it in the worst way," Cramer said on " Squawk on the Street ." The Treasury Department announced Wednesday that it will more than double the maximum size of its buybacks of longer-dated government debt to at least $4 billion from $2 billion. The move follows a recent sharp rise in bond yields, which move inversely to price. On Tuesday, the 30-year Treasury topped 5.33%, its highest level in nearly two decades .
Financial TimesUS Treasury to double buybacks of long-term government debt Sharp sell-off in recent weeks has sent borrowing costs soaring
MarketWatchThe effect of a debt buyback can be to push prices higher and yields lower The Treasury Department said Wednesday that it will more than double the size of government-debt buybacks, sending yields sharply lower and stocks higher at the market open.
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.
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According to the statement, "this increase in buyback operation sizes reflects Treasury’s desire to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants, as evidenced by the significant volume of high-quality offers Treasury routinely receives in longer-dated buyback operations."
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CNBCThe change will start Sept. 9 and stay in effect through Nov. 4. "This increase in buyback operation sizes reflects Treasury's desire to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants, as evidenced by the significant volume of high-quality offers Treasury routinely receives in longer-dated buyback operations," the department said in a statement. This is breaking news. Please refresh for updates.
Epoch Times BusinessIncreasing buyback operation sizes indicate the Treasury’s commitment to offer more liquidity support amid consistent and robust demand from investors, “as evidenced by the significant volume of high-quality offers Treasury routinely receives in longer-dated buyback operations,” the department said in an Aug. 19 statement.
BloombergUS Treasury Increasing Long-Dated Buyback Cap to at Least $4 Billion The US Department of the Treasury announced it will at least double the maximum size of its liquidity support buyback operations for longer-dated nominal coupon securities to at least $4 billion per operation, effective September 9, 2026. Michael McKee reports on Bloomberg Television. (Source: Bloomberg)
Washington Times BusinessBut Treasury yields fell in the morning after the U.S. Treasury Department said it will at least double the size of its planned purchases of longer-term Treasurys from Sept. 9 through Nov. 4. The department said it’s doing so “to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants.”
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Rising oil prices are main driver behind this recent surge in bond yields, as investors fear inflation could spike again.
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CNBCSovereign bond yields around the world are on the rise, with many on Wall Street pointing to rising oil prices and inflation fears as the culprits .
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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The 30-year Treasury yield, which has recently touched its highest level since 2007, fell more sharply to 5.19% from 5.28% late Tuesday.
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Epoch Times BusinessOn Aug. 17, the 30-year Treasury yield topped 5.31 percent, the highest since June 2007.
CNBCThe longer-dated 30-year Treasury bond yield fell over 1 basis point to 5.272%, after notching a new 19-year high on Tuesday at over 5.33%.
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The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — fell 2 basis points to 4.686%.
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The moves were part of a wider sell-off in long-dated global bonds on Tuesday. Japan's 10-year bond yield reached its highest level in three decades. German 30-year bund yields hit their highest point since 2011, while rates on France's 30-year bond reached the highest going back to 2008.
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Epoch Times BusinessHungry for Yield Global bond yields have also come under pressure this year. Japan’s 10-year bond yield is at a three-decade high. Germany’s 30-year yield climbed to the highest level since 2011. France’s 30-year yield also reached an 18-year high.
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Global bond sell-off deepens amid fears over inflation and AI issuance Long-term government borrowing costs hit multi-decade highs
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BBC BusinessPublished Long-term borrowing costs across some of the word's biggest economies hit fresh highs because of concerns over inflation, government debt levels and spending on Artificial Intelligence (AI).
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Instead, longer-term yields are set by investors in the bond market, who are deciding how much interest they need to get paid by the U.S. government in exchange for lending it money. And recently, they have been demanding more in interest to make up for the growing risks of high inflation, continued government deficits and other factors.
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Epoch Times BusinessGould attributed factors such as investors weighing inflation expectations, growing federal deficits, stronger-than-expected economic data, and the increased issuance of Treasurys to finance government spending as contributing to elevated long-term yields.
BBC BusinessBond investors typically demand higher returns - or yields - if inflation is high or they expect it to be elevated in the future.
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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 Bloomberg Bessent Deploys Debt Buybacks in Sign of Concern Over Yield Rise US Treasury Secretary Scott Bessent made a fresh attempt to rein-in long-term borrowing costs from multi-year highs, sending Treasury yields and the dollar down. Ira Jersey, Chief US Interest Rates Strategist for Bloomberg Intelligence, discusses the move. (Source: Bloomberg)
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02 MarketWatch Bonds have been under pressure, with yields surging. Yields fell following the announcement.
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03 CNBC Yields fell sharply following Wednesday's announcement, while stocks rose . "It's a put. It's an obvious put," Cramer said, using an options term for a contract designed to protect an investor from downside risk. Cramer and others in the past have referred to the Trump administration's tendency toward market-friendly policies as a "Trump put." In Wednesday's announcement, the Treasury said it will target securities in the 10- to 20-year and 20- to 30-year portions of the bond market, where demand has weakened. The program does not reduce the government's overall debt load, but is designed to improve liquidity by buying back existing securities.
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04 ZeroHedge Over the past several years, one of the more amusing debates gripping the market's Fed-watchers was whether the Fed's treasury buyback auctions were a form of soft QE, with this website consistently arguing that - contrary to what washed out ex-Bridgewater traders with a newsletter to sell may tell you - Treasury buybacks were just that, to wit:
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05 Washington Times Business NEW YORK — U.S. stocks are ticking higher Wednesday after the U.S. Treasury Department said it will buy more U.S. government bonds in a move that eased pressure on financial markets worldwide. Strong profit reports for the spring from Estee Lauder, Target and other U.S. companies are also helping to support the stock market.
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06 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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07 BBC Business The interest rate on US borrowing over 30 years hit 5.33% on Tuesday, the highest since June 2007, meanwhile UK long-term debt reached 5.85%. There were similar moves in Germany and Japan.
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08 RealClearMarkets The US 30‑year Treasury yield rose sharply on Monday, breaking higher after spending the first half of August in a tight range. The move signals the bond market’s growing unease with several risk factors, including inflation and government debt. Read Full Article »
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