Key Highlights

  • The 30-year Treasury Yield rose 3 basis points to 5.2256%, a day after plunging more than 10 basis points on the Treasury Department's buyback announcement.
  • The 10-year Treasury yield edged 1 basis point higher to 4.6723%, while the 2-year yield held roughly steady near 4.1727%.
  • Treasury Secretary Scott Bessent said Wednesday the department would double the size of its Debt buybacks, mainly targeting the long end of the yield curve, sending yields tumbling on the day.
  • The buyback announcement came as total US government debt surpassed USD 40 trillion, more than double its level of a decade ago.

Yields Edge Higher After Sharp Pullback

Bond yields edged higher Thursday morning after pulling back sharply in the prior session following the Treasury Department's move to significantly expand government debt repurchases in an effort to support longer-dated debt. The yield on the 30-year Treasury, the primary focus of the accelerated buyback, rose 3 basis points to 5.2256%. The 10-year Treasury yield, the main benchmark for mortgages, auto loans, and Credit card debt, moved 1 basis point higher to 4.6723%. The 2-year Treasury yield, which more closely tracks near-term Federal Reserve rate expectations, held roughly steady at 4.1727%.

Wednesday's Buyback Announcement Triggered a Sharp Reversal

The Treasury Department, led by Bessent, said Wednesday it would double the size of its debt repurchases, concentrated at the long end of the yield curve. The announcement sent yields tumbling, with the 30-year yield plunging more than 10 basis points on the day and the 10-year yield falling more than 6 basis points, reversing the week's earlier advance. Treasury yields had been climbing steadily since June, reaching levels not seen since before the 2008 global financial crisis. Global government bond yields eased in tandem with the US move.

Announcement Coincided With Debt Crossing USD 40 Trillion

The buyback announcement came the same day total US government debt surpassed USD 40 trillion for the first time, more than double its level of a decade earlier. The timing underscored the scale of the fiscal backdrop against which the Treasury is now attempting to manage borrowing costs at the long end of the curve.

Fed Minutes Add Another Data Point for Traders

Traders were also weighing the Federal Open Market Committee's July meeting minutes, released Wednesday. Economic data published since that meeting have shown modest monthly price increases, though Inflation remains above the Federal Reserve's 2% target.

Conclusion

The modest uptick in yields Thursday suggests markets are still working through the scale of Wednesday's buyback announcement rather than reversing its impact outright. With long-dated yields still elevated by historical standards and the Fed holding a cautious stance on rates amid above-target inflation, the durability of Wednesday's relief will likely depend on whether the Treasury's expanded Buybacks can offset the deeper fiscal pressures tied to the growing debt load.