Treasury Raises Bond Buyback Size as Yields Rebound
Treasury Secretary Scott Bessent said Treasury will increase the maximum size of repurchases of 10- to 30-year government bonds from $2 billion to at least $4 billion per operation, after yields briefly fell and then rose again.
S. borrowing costs. His surprise decision to double long-term bond buybacks briefly sent yields tumbling Wednesday, but by Thursday the bond market was pushing back. Treasury said it would increase the maximum size of its repurchases of 10- to 30-year government bonds from $2 billion to at least $4 billion per operation.
At first, the announcement appeared to work. 19% Wednesday. 27%. Bessent can try to make the Treasury market run more smoothly.
What he cannot do with a buyback is make the government's borrowing needs disappear. Bessent's Hedge-Fund Playbook Bessent spent decades betting on how governments would respond when their currencies or borrowing costs came under pressure. At George Soros' hedge fund, he helped make more than $1 billion betting against the Japanese yen in 2013 before founding his own macro fund, Key Square. As Treasury secretary, he recently found himself on the other side of that trade.
S. government debt, to sell Treasuries to raise dollars. That would push American borrowing costs even higher. S.
to buy $5 billion to $10 billion worth of Japanese yen. S. joined Japan in propping up the currency, while Bessent urged Tokyo to borrow dollars against its Treasury holdings instead of selling them. Former Treasury Secretary Henry Paulson explained why helping Japan was in America's interest: "We don't need them selling Treasuries right now," he said.
S. bond market. Why The Bond Market Is Fighting Back But neither intervention addresses the deeper forces pushing yields higher: federal debt above $40 trillion, persistent deficits, inflation concerns and heavy borrowing tied to the AI investment boom. "We don't think this can succeed, in isolation," TwentyFour Asset Management portfolio manager Eoin Walsh told the Financial Times.
" Prediction-market traders also expect pressure on the benchmark 10-year Treasury. 8% before 2027 and a 27% chance it touches 5%. 67% in Freddie Mac's latest weekly survey. 9% this year and a 41% chance it tops 7%.
Higher yields increase mortgage rates, raise the government's interest bill and pressure rate-sensitive technology stocks in funds such as the Invesco QQQ Trust (NASDAQ: QQQ ). A hedge-fund manager can walk away from a losing trade. The Treasury secretary has to keep funding the government. Image: Shutterstock Read Also: Trump Praises Prediction Markets as Report Finds Traders Made $8 Million on Suspicious Military Bets