U.S. 30-Year Bonds Erase Gains From Treasury’s Buyback Surprise
U.S. bonds unwound all of the gains that followed Treasury Secretary Scott Bessent’s plan to increase buybacks of longer-dated debt, a sign that investors see it as only a short-lived remedy to curb borrowing costs.
The moves pushed the 30-year yield on Thursday higher by seven basis points to 5.26%, back to levels seen just before the Treasury’s announcement a day prior. The 10-year yield touched 4.71%, just shy of its highest level since early 2025.
The moves highlight skepticism over the impact of the new measures, which will see the Treasury Department boost the size of liquidity support buyback operations by at least double for securities dated from the 10-year to the 30-year sector.
The “market is not fully buying the narrative that Bessent can credibly keep long-end yields in check,” said Howard Du, a strategist at TD Securities in New York.
Bessent’s latest intervention betrayed Washington’s growing unease with elevated borrowing costs, though analysts warned that his plan risks being only a short-term fix.
Concerns remain in the market about outsized fiscal deficits, oil-induced inflation and broader supply pressure from the AI industry’s borrowing binge.
From Franklin Templeton to Nomura Holdings Inc., the positive effect of the announcement — which spilled into global markets — was expected to be limited. Rates in the U.K. and most European nations edged higher on Thursday, hovering around the multi-year peaks reached in recent days.
There’s a “synchronicity of forces arguing for higher yields, steeper yield curves” with the largest developed markets all facing fiscal pressures and stubborn inflation, said Andrew Canobi, a director of fixed income at Franklin Templeton. “I can’t see the longer end finding too much of a bid as long as those forces are prevailing.”
This article was provided by Bloomberg News.
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