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Treasury plans larger buybacks for long-end notes starting Sept. 9
The move raises maximum 10-to-20-year and 20-to-30-year buybacks to at least $4 billion per operation, but the 30-year yield rebounded to 5.247% within 24 hours.
Yahoo Finance reports that the U.S. Treasury will expand its liquidity-support buybacks for off-the-run nominal Treasuries, targeting older, less-liquid issues in the 10-to-20-year and 20-to-30-year maturity ranges.
According to the report, the maximum size of those buybacks will be at least doubled, from $2 billion to at least $4 billion per operation, with the change beginning Sept. 9 and running through the Nov. 4 quarterly refunding. Treasury said the purchases aim to improve market functioning rather than reduce overall federal debt.
The article notes that the market initially reacted positively after the Aug. 19 announcement, with the 30-year yield dropping nearly 10 basis points to 5.187% from 5.337% the prior day, and the 10-year yield falling to 4.651%. However, by Aug. 20, the 10-year yield rose 4.7 basis points to 4.70%, and the 30-year yield climbed back to 5.247%, wiping out the earlier gains.
The piece frames the issue as a policy collision, with Treasury seeking lower long-term yields while the Fed addresses inflation, and it highlights how deficits, inflation compensation, geopolitical risk, and heavy government supply are driving investors to demand higher yields on long-dated Treasuries.