US Treasury Announces $6 Billion Buyback as Yields Rise
US Treasury Secretary Scott Bessent announced a plan Wednesday. The US Treasury will buy back $6 billion in government debt.
This aims to reduce borrowing costs and ease a bond sell-off. It also aims to control rising bond yields.
The buyback will target 10-year and 20-year bonds. This buyback is three times the usual size.
It is also larger than earlier announced. Investors had expected a bigger buyback plan.
They reacted negatively to the smaller size. The 10-year Treasury yield rose to about 4.85%.
That is its highest level since late 2023. The 30-year yield reached about 5.2%.
That is its highest level since the 2008 financial crisis. Borrowing costs are now at their highest in three years.
Rising inflation pushed investors away from US bonds. Uncertainty from the war in Iran added to this.
Key Terms 3
- Treasury Secretary The top US official in charge of government money and debt.
- buyback When the government buys back debt it had sold earlier.
- bond yield The return investors earn from lending money to the government.