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Treasury doubles buyback program size for 10 to 30-year maturities

The increase raises the program from $2 billion to $4 billion for 10-30 year Treasuries, a change aimed at supporting liquidity rather than setting yields.

Reported · Written up by our desk · Government Bonds

Mortgage News Daily reports that the U.S. Treasury announced it will double the size of its existing buyback program for 10-30 year maturities, increasing it from $2 billion to $4 billion.

The outlet said the move is not quantitative easing, noting that Treasury has run buyback operations for more than two years primarily to support liquidity in the bond market rather than to influence yield levels directly.

Even so, the report adds that bond yields can still be affected because buyback announcements change the composition of buying demand, including by giving Treasury a channel to purchase illiquid older securities from sellers who might not otherwise have sold.

Mortgage News Daily also cited a recent report to the Treasury Borrowing Advisory Committee indicating a large surplus of dealers looking to sell bonds in the 10-30 year range.

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