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Treasury yields bounce back after stepped-up government bond buying

Despite a sharp increase in Treasury purchases announced by Secretary Scott Bessent, the 10-year yield returned near its prior level, while the 30-year yield remained around multi-decade highs.

Reported · Written up by our desk · Government Bonds

The Guardian reports that the Treasury Department announced it would sharply ramp up its purchases of Treasury bonds to lift bond prices and push yields down.

However, yields fell briefly after the intervention and then rebounded, with the 10-year Treasury yield back near levels seen before the announcement by Friday afternoon, while the 30-year bond was trading around its highest level in more than 20 years.

The outlet links the pressure on yields to higher inflation since 2022, saying it has increased the cost of servicing federal debt, which it describes as having reached a record $40tn.

The story adds that this year, interest payments are expected to absorb 13.5% of all federal spending, and notes that higher Treasury yields also weigh on rates across the economy, including benchmarks for mortgage lending, contributing to a frozen housing market.

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