U.S. Treasury Announces $6 Billion Buyback, 10-Year Yield Rises to 4.85%

The U.S. Treasury announced a $6 billion buyback to reduce volatility in the long-term Treasury market, but it fell short of market expectations. Immediately following the announcement, U.S. Treasury prices dropped, causing the 10-year yield to rise to 4.85%, marking the highest level since 2023. The Treasury stated that it would purchase up to $6 billion of bonds maturing in 10 to 20 years in the buyback scheduled for the 10th. This amount is $2 billion more than the 'minimum of $4 billion' proposed last month. However, the market had anticipated purchases exceeding $4 billion, with some speculating figures as high as $10 billion. The announced $6 billion did not meet expectations, leading to selling pressure in the Treasury market. Peter Buchva, CIO of BFG Wealth Partners, noted that some investors had expected the buyback to reach $7 billion to $8 billion, and the rise in yields was attributed to the disappointment of these expectations. On the same day, a $39 billion auction of 10-year Treasury bonds attracted strong demand from investors, but the Treasury's market stabilization measures were interpreted as falling short of investor expectations. If long-term interest rates remain high, it could increase the financing burden for households and businesses.