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Treasury plans to buy back more long-term Treasuries, easing yields
The Treasury said it will at least double its 10-year, 20-year, and 30-year buybacks starting Sept. 9 through Nov. 4, with implications for Fed policy if inflation stays firm.
The U.S. Treasury has announced plans to increase its buyback program for long-term government Treasuries, pushing down long-term yields and complicating the Federal Reserve’s policy outlook, according to reporting from Yahoo Finance. Treasury Secretary Scott Bessent said the government would at least double the amount of 10-year, 20-year, and 30-year Treasuries it buys back. The operation is set to begin Sept. 9 and remain effective through Nov. 4, after the 30-year Treasury yield rose to its highest level in 19 years earlier this week. Yahoo Finance noted the backdrop for the selloff in yields included investor concerns about higher fiscal deficits, heavy AI borrowing, and inflation pushing up borrowing costs globally. That dynamic matters for the Fed because short-term policy rates influence the broader yield curve, which in turn affects consumer and business borrowing costs. In interviews, Wilmington Trust senior bond portfolio manager Wil Stith said Chairman Kevin Warsh is in an uncomfortable position as markets had been pricing a scenario where the longer end of the bond market would do more of the policy tightening. Stith added that if inflation remains flat or rises, the Fed could be forced to raise rates more aggressively to offset the expansionary effect of Treasury actions aimed at lowering yields.
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