US Treasury Secretary Scott Bessent has taken a new step to bring down long-term US government bond yields. The Treasury said it will at least double the amount of long-term Treasury bonds it buys back. The buybacks will cover 10-year, 20-year and 30-year Treasury bonds.
US Treasury bond buybacks may lower yields temporarily, but inflation, deficits and heavy borrowing could keep US bond yields under pressure. (AFP)
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The new operation will start on September 9 and continue through November 4, according to the Treasury. The move immediately pushed US government bond yields lower. But the bigger question is whether the Treasury can keep yields down for a long time. Wall Street experts say the answer may be no, because the main reasons behind high yields have not gone away, according to Yahoo Finance.
Why did the Treasury make this move now?
The decision comes after the 30-year US Treasury yield reached its highest level in 19 years earlier this week. Investors have been worried about several factors pushing borrowing costs higher. These include larger US government budget deficits, higher inflation and heavy borrowing by technology companies.
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Tech companies are raising huge amounts of money to build data centers and expand their artificial intelligence businesses. This creates more competition for investor money that could otherwise go into US government bonds. The result is pressure on Treasury prices and higher bond yields.
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Tech companies are raising huge amounts of money to build data centers and expand their artificial intelligence businesses. This creates more competition for investor money that could otherwise go into US government bonds. The result is pressure on Treasury prices and higher bond yields.
Durva More is a Senior Content Producer at Hindustan Times, where she covers finance, and global news. She brings experience across digital and television journalism, with a strong focus on breaking news, business reporting, and international affairs. Before joining Hindustan Times, Durva worked as an International News Writer at The Economic Times, covering a diverse range of subjects including global politics, business, sports, entertainment, and major world events. She also worked as a Business Reporter with NDTV Profit. A postgraduate diploma holder in Journalism from the Asian College of Journalism, Durva is passionate about field reporting and storytelling. She thrives on the adrenaline of chasing stories, speaking with people from different walks of life, and amplifying voices that deserve to be heard. Her reporting is driven by curiosity, accuracy, and a commitment to making complex subjects accessible to readers. When she is not chasing stories or covering breaking news, Durva enjoys reading books and painting. She loves exploring new ideas, meeting people, and learning about different perspectives. For her, both journalism and art are ways to understand the world and tell stories that matter.
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Home/Business/Can Treasury control US bond yields? Why Bessent’s buyback move may only offer temporary relief
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