Treasury plans US$6-billion in debt repurchases to battle rising yields — SkimNews
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- Treasury Department will repurchase up to $6 billion of long-dated debt Thursday, tripling its $2 billion buyback operation from last month, targeting bonds maturing in 10 to 20 years.
- Bond markets punished the announcement — the 10-year Treasury yield rose 0.03 percentage points to approximately 4.83%, the highest since October 2023; the 20-year yield climbed to nearly 5.3%.
- Wells Fargo analysts said the selloff "shows that some market participants were likely expecting larger operations."
- Treasury Secretary Scott Bessent defended both his bond-buyback strategy and his intervention to prop up the Japanese yen at Southern Methodist University, claiming he has "asymmetric information" and telling critics: "You can bet against me if you want."
- Fed Chair Kevin Warsh is signaling potential rate hikes to fight inflation, creating a communication clash with Bessent's push to lower long-dated yields.
- The Federal Reserve may raise rates to fight inflation tied to Middle East turmoil, while an AI-driven growth outlook and widening government deficits are also pushing yields higher.
- Scholar George Athanassakos, cited at the story's bottom, argued Bessent's revisit of "Operation Twist" will be a failure.
Why it matters: The Treasury's $6 billion buyback failed to move yields — the 10-year hit ~4.83%, the highest in three years — and the Bessent-Warsh split on rate direction means consumer borrowing costs for mortgages, autos, and credit are likely to stay elevated even as the Treasury explicitly tries to ease them.
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