Bonds & Rates
Home›Bonds & Rates›Government Bonds›Treasury buyback update due to target 10- to 20-year y…
Treasury buyback update due to target 10- to 20-year yields
The next repurchase announcement is expected Wednesday just hours before the Treasury’s 10-year note sale and one day ahead of a 30-year bond auction.
Treasury Secretary Scott Bessent is expected to outline the size of the next daily debt buyback operation aimed at restraining US bond yields, a move that has pushed Wall Street expectations into a narrow range. The Treasury Department is expected to announce the size of the repurchase for outstanding 10-year to 20-year securities on Wednesday, with past precedent pointing to an 11 a.m. Washington timing.
It will be the first such release since the Treasury surprised markets on Aug. 19 by indicating it would at least double the roughly $2 billion sizes previously planned just two weeks earlier. While Bessent has declined to pre-signal the Sept. 10 buyback total, his remarks have helped fuel expectations that the operation could exceed $4 billion, as investors weigh how much the initiative can cool longer-dated yields.
With 10-year yields now reportedly even higher than levels seen last month, market stakes are high given that longer-dated rates can flow through to mortgage pricing. LiveMint Markets, citing Bloomberg reporting, notes that a smaller-than-expected amount such as $4 billion could disappoint investors and add to selling pressure, while a much larger operation could set a new baseline for future longer-dated buybacks, with the next one due in about two weeks.
The timing of Wednesday’s announcement is also notable because it arrives just hours before the Treasury’s next sale of 10-year notes and one day before a 30-year bond auction, meaning traders will be adjusting positions quickly as the information lands. According to a note from Wrightson ICAP’s Lou Crandall cited in the coverage, a $5 billion to $6 billion range is a plausible starting point, while he also said larger increases would not be out of character given the Treasury’s rapid strategy shifts.