Long-term Treasury yields extended their sharp decline after the U.S. Treasury Department said it would double the size of its buyback operations for longer-dated securities. The 10-year Treasury yield traded near 4.64%, down from a 20-month peak of 4.75% earlier in the week, while the 30-year yield slipped below 5.2% after recently touching a 19-year high of 5.34%.
The Treasury said it will at least double the size of its liquidity-support buyback program for securities maturing in 10 to 30 years. Scott Bessent has previously described this program as a key tool for alleviating market dislocations and bolstering liquidity.
Long-term Treasuries came under severe pressure in August, as a surge in AI-related corporate debt issuance, widening fiscal deficits, and worries about stubborn inflation all contributed to higher estimates for term premia. At the same time, minutes from the Federal Reserve’s July meeting showed that some policymakers favored additional rate increases this year to guard against a renewed pickup in inflationary pressures.
