US Treasury to buy back 10- and 20-year bonds worth $6 billion

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Summary · why it matters

The US Treasury announced on Wednesday, September 9, that it plans to buy back 10-year and 20-year US government bonds worth $6 billion to boost liquidity and support government bond prices under pressure from rising bond yields. This buyback amount is three times the normal buyback level and higher than what US Treasury Secretary Scott Bessent said in August, when he indicated the buyback of older bond issues would be increased by at least two times, or about $4 billion. However, the market had expected the buyback to be between $6 billion and $10 billion, making the announced $6 billion the lower bound of expectations. As a result, the market reacted negatively and long-term bonds saw selling pressure, with the 10-year bond yield reaching 4.841%, while the 20-year bond yield rose to 5.314%, and the 30-year yield jumped 5 basis points, breaking above 5.3%. The buyback will be conducted on Thursday, lasting 20 minutes and ending at 2:00 p.m. US Eastern Time. The rise in US bond yields stems from multiple factors, including rapidly increasing government debt that just surpassed $40 trillion, inflation concerns from import tariff measures, the Iran war, and crude oil prices breaking above $100 per barrel on Wednesday.

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