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US Treasury boosts next 10- to 20-year bond buyback to $6 billion
The initial target rose from $2 billion, and the move was met with early investor disappointment, helping push the 10-year yield to about 4.83%.
The US Treasury tripled the initial size of its next buyback of longer-dated government debt to up to $6 billion, covering securities maturing in the 10- to 20-year sector, LiveMint Markets reports. The department described the action as part of an expanded buybacks program, with the new figure set at triple the previously communicated $2 billion.
Investors and analysts viewed the larger purchases as reflecting concern about the rise in long-term borrowing costs with weeks to go before the November congressional election, according to LiveMint Markets. After the announcement, Treasuries initially extended an earlier decline, with the yield on 10-year notes up about 5 basis points to roughly 4.83% as of 11:35 a.m. New York time, the highest level since 2023.
Dealers had raised expectations for the Thursday operation after Treasury Secretary Scott Bessent publicly touted purchases of more than $4 billion. Bessent reiterated that he cannot alter the Treasury market’s equilibrium price, but he said the goal was to slow moves lower and prevent a damaging narrative in the world’s biggest bond market, LiveMint Markets reports.
Strategists said the market treated the larger buyback plan as less than investors wanted. Deutsche Bank AG strategist Steven Zeng said the market is trading the move like a disappointment because it was not the “shock and awe” investors expected, adding that the Treasury effectively created a situation it now has to keep addressing. The Treasury offered no additional details beyond Thursday for how the buyback pace would play out beyond other scheduled operations in the quarter.