US Treasury to Buy $6 Billion in Bonds Despite Yields Rising Above 5%
Despite Scott Bessent's announcement of a $6 billion bond buyback, the US 30-year yield surged past 5.3%, marking a level not seen since mid-2007.
Wall Street reacted negatively to Treasury Secretary Scott Bessent's Wednesday plan to purchase up to $6 billion in longer-dated bonds. The market interpreted the move as a failure to contain rising rates rather than a tool for liquidity. Consequently, yields climbed sharply instead of falling. The 30-year bond yield rose to 5.353%, the highest level recorded since June 2007. Simultaneously, the 10-year benchmark increased from 4.79% to 4.85%. Earlier in the month, Bessent had proposed a $2 billion purchase, subsequently raised it to $4 billion, and finally escalated it to $6 billion. He stated that recent yield surges do not reflect fundamental market conditions. However, inflation data released on Thursday showed US Producer Price Index rising 5.4% in August, exceeding expectations. Higher oil prices also pressured assets; WTI crude surpassed $100 per barrel and Bitcoin dipped below $77,000 amid broader macro concerns.
