US Treasury Doubles Long-Term Bond Buybacks; 10-Year Yield Rises to 4.7339%
The US Treasury doubled its early buyback program for long-term bonds to manage supply and reduce financing costs, triggering a selloff in Treasuries. The 10-year yield rose 4.18 basis points to 4.7339% for the week, while the two-year yield climbed 6.68 basis points to 4.2359%. The dollar index fell 1% to 98.84, and spot gold surged about 5% to $4,604.09 per ounce. With total US debt near $32 trillion, market participants drew parallels to Japan's bond-buying strategy, though the impact remains uncertain.
The US Treasury announced this week that it will double the size of its early buybacks of long-term bonds. The move aims to actively manage bond supply to lower financing costs. The Treasury did not disclose the specific buyback amount, but the market reacted quickly.
After the announcement, US Treasuries were sold off, pushing yields higher. The 10-year benchmark yield rose 4.18 basis points for the week to 4.7339%; the two-year yield rose 6.68 basis points to 4.2359%. The dollar index fell about 1% this week to 98.84. Spot gold hit a three-month high, rising about 5% for the week to close at $4,604.09 per ounce, with a single-day gain of 1.88% on Friday.
The Treasury's expanded buybacks come at a time when the Treasury market is large, with total US government debt at roughly $32 trillion. Market participants compared the operation to Japan's earlier large-scale bond purchases to lower financing costs, but the specific impact remains to be seen.