U.S. to Buy Back More Longer-Term Bonds — Update
By Paulo Trevisani
The U.S. Treasury said Wednesday it will buy back more of its longer-term bonds, in an effort to curb a sharp increase in borrowing costs.
"The current maximum size of $2 billion per operation will be at least $4 billion per operation," the department said in a statement.
The new buyback targets longer-dated nominal coupon securities with maturities 10 years or longer. It will take effect Sept. 9 through Nov. 4, the Treasury said. It will give an update on future buyback sizes at the next quarterly refunding, scheduled for Nov. 4.
The announcement intensified an overnight decline in Treasury yields, which have reached multiyear highs in the past few days.
The 30-year yield settled at 5.31% Monday, the highest since June 2007. That was just a few days after the Treasury paid the highest 30-year yield in an auction in 25 years, at 5.22%.
The Treasury effort, however, may not be enough to provide long-term stability in bond markets, said Ross Pamphilon, fixed income head at asset management firm Impax.
"If you put that into context, that's an additional $2 billion or $4 billion in total compared to a $31 trillion U.S. Treasury market. So, you know, drop in the bucket, relatively modest," he said.
He said a long-term fix would require more fiscal discipline. For now, Pamphilon plans to keep his investment strategy focused on two-year to 10-year bonds while avoiding longer duration.
"There are more sellers of long-dated government bonds so they stepped in to provide liquidity," he said. "That's a worrying sign to me. "
The dollar also weakened following the buybacks announcement.
The 10-year Treasury yield fell to 4.651% from 4.682% before the repurchase news. The 30-year yield dropped to 5.202% from 5.266%.
The WSJ Dollar Index was down 0.6%, as the greenback weakened 0.7% against the Japanese yen and the euro and as much as 1.2% versus the Swiss franc.
Write to Paulo Trevisani at paulo.trevisani@wsj.com
(END) Dow Jones Newswires
August 19, 2026 11:20 ET (15:20 GMT)
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