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US Treasury to double liquidity support buybacks for 10- to 30-year debt
The Treasury said it will increase buyback operation sizes by at least double after 30-year yields revisited levels not seen since 2007.
The US Treasury announced it is ramping up liquidity support buybacks for long-dated government debt, citing market conditions after yields on 10-year to 30-year securities moved to multi year highs. The Treasury Department said the changes include increasing, by at least double, the size of buyback operations for securities dated from the 10-year to the 30-year sector.
The announcement came about two weeks after the Treasury released its planned schedule for buybacks for the quarter. Treasury Secretary Scott Bessent previously framed the program as part of a broader toolkit to address dislocation in the Treasuries market, if needed.
Officials tied the timing to recent moves in longer maturity yields, with 30-year bond yields revisiting their highest levels since 2007 this week. After the announcement, yields fell across the curve, and 30-year rates dropped as much as 9 basis points to 5.19%.
The Treasury said the larger buyback sizes reflect a desire to provide greater liquidity support in longer-dated nominal sectors where it receives strong sponsorship from market participants. Traders are also looking ahead to a $16 billion auction of new 20-year bonds.