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Treasury expands long-end buyback ceiling, lifting risk assets

The Treasury said the maximum size of its longer-dated liquidity-support buybacks will rise to at least $4 billion per operation, before the larger trades begin on September 9.

Reported · Written up by our desk · Government Bonds

The Dow Jones Industrial Average climbed near 53,600 on Wednesday, gaining more than 230 points, as a Treasury announcement supported long-end rates and, in turn, lifted equities, according to FXStreet.

Earlier in the day, the U.S. Treasury said it would at least double the maximum size of its longer-dated coupon liquidity-support buyback operations, raising the cap from $2 billion to at least $4 billion per operation.

FXStreet reported that no additional bonds were actually purchased at the time of the announcement, and that the larger operations are scheduled to start September 9 and run through November 4, with the plan revisited at the quarterly refunding on November 4.

The outlet also tied the move to market pricing in the long end, noting that the 30-year Treasury yield fell from above 5.33% on Tuesday to near 5.19%, while the 10-year note dropped to around 4.65%, after the announcement.

Latest closeDow Jones 53,732.41 ▼0.2%

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