Bond yields edge higher as traders digest Treasury debt buyback plan
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- U.S. Treasury Department, led by Scott Bessent, announced Wednesday it would double the size of its debt repurchases, primarily targeting the long end of the yield curve.
- 30-year Treasury yield rose 3 basis points to 5.2256% Thursday, after plunging more than 10 basis points on Wednesday's buyback announcement.
- 10-year Treasury yield edged up 1 basis point to 4.6723% — the main benchmark for mortgages, auto loans, and credit card debt — while the 2-year note held steady at 4.1727%.
- The buyback expansion came as total U.S. government debt surpassed $40 trillion, more than double the level of a decade ago.
- Treasury yields have been climbing steeply since June, touching levels not seen since before the 2008 Global Financial Crisis.
- Traders were also digesting the July FOMC minutes released Wednesday, with recent data showing modest monthly price increases but inflation still above the Fed's 2% target.
Why it matters: With U.S. debt above $40 trillion and the 30-year at 5.22% — pre-2008-crisis territory — the Treasury is doubling buybacks at the exact maturity where interest costs hurt most. Mortgage and auto borrowers feel the 10-year benchmark at 4.67%, and the Thursday bounce shows the market doesn't believe one round of intervention fixes a structural debt trajectory.
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