Longer-dated Treasury yields rise as Bessent's bond buyback rally fizzles out
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- 30-year U.S. Treasury yield rose 1 basis point to 5.2508% on Friday, while 10-year and 2-year yields held flat at 4.7001% and 4.1828% respectively
- Thursday's session saw both 10-year and 30-year yields jump more than 5 basis points, wiping out earlier declines that followed Bessent's ramped-up debt repurchases aimed at easing long-end pressure
- Treasury Secretary Scott Bessent had launched an expanded repurchase program specifically targeting the long end of the curve, but the initial rally reversed within a session
- HSBC's Willem Sels attributed the rebound in long-term yields to market concerns that the Fed has become "less credible or predictable" under Chairman Kevin Warsh
- Sels countered that the key concerns are actually supply from U.S. hyperscalers and the U.S. government, predicting Fed credibility fears should fade as policy becomes clearer over time
Why it matters: The 30-year yield's rebound to 5.25% after Bessent's buyback intervention signals that supply pressure from U.S. government debt is overwhelming demand-side fixes. Mortgage borrowers, businesses, and the federal government itself face sustained higher long-term borrowing costs unless Treasury supply eases or Fed credibility concerns resolve.
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