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U.S. Treasury to double liquidity support buybacks for longer-dated bonds
The increase raises buybacks for longer-dated nominal coupon securities from $2 billion to at least $4 billion per operation, effective Sept. 9 through Nov. 4.
U.S. long-dated Treasury yields fell sharply on Wednesday after the U.S. Treasury said it will expand liquidity support buyback operations for longer-dated bonds, according to Reuters.
The Treasury will double the size of buybacks for the 10-year to 20-year sector and the 20-year to 30-year sector, increasing each operation from $2 billion to at least $4 billion. The change is effective from Sept. 9 through Nov. 4, Reuters reported.
Following the announcement, 30-year Treasury yields dropped almost 10 basis points to around 5.187%, and were last trading about 7 bps lower on the day, the outlet said.
A Reuters report also noted that the Treasury move is meant to address pressures on the long end of the bond market, with the statement pointing to the need to limit risks to other asset classes.