Treasury’s $4 bn Bond Buybacks Fail to Hold Yield Drops
· World · Economic Times, CNBC, Bloomberg
Treasury Secretary Scott Bessent expanded the Treasury’s bond‑buyback program to as much as $4 billion per operation. The increased purchases initially lowered long‑term Treasury yields but the 10‑year rate soon moved back toward 4.7% and the 30‑year also regained ground. Investors quickly shifted attention to broader pressures such as the growing fiscal deficit, heavy government borrowing and persistent inflation. The Treasury expects to issue hundreds of billions of dollars of debt this quarter, dwarfing the size of the buybacks. Analysts say the buybacks remain small relative to the overall US bond market, limiting their ability to curb borrowing costs.
Why it matters
Higher US yields increase borrowing costs for governments and corporations worldwide, including Indian firms, and can push up rupee funding rates. The limited impact of the buybacks signals continued volatility in global bond markets that Indian investors watch closely.
Read the original report — Economic Times
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