U.S. Treasury Announces Expansion of $4 Billion Long-Term Bond Buyback

The U.S. Treasury has announced that it will expand the buyback size of 10- to 30-year bonds to a minimum of $4 billion per transaction. This measure will be in effect from September 9 to November 4, aiming to support liquidity in the long-term segment. However, the announcement comes at a time when the yield on 30-year bonds has reached its highest level since 2007, leading to controversy. Some market participants interpret this as a response by the Treasury to signals in long-term interest rates. Immediately after the announcement, the yield on 30-year bonds fell to 5.188%, but soon returned to 5.208%. Stanley Druckenmiller criticized this move as a response close to price management, emphasizing that the long-term bond market serves as a check on U.S. finances. In contrast, the Treasury describes this expansion as an adjustment to the regular buyback program. The crypto market also reacted, with Bitcoin (BTC) and Ethereum (ETH) rising. The Treasury is expected to announce additional buyback sizes after November 4.

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