Posted on 08/20/2026 7:42:35 AM PDT by Miami Rebel
Bond yields climbed Thursday, erasing most of the pullback they saw the previous day after the Treasury Department announced an intervention aimed at easing pressure on longer-dated government debt.
The yield on the 30-year U.S. Treasury bond — the primary focus of the accelerated buyback — was up more than 4 basis points at 5.236%.
Yields on 10-year U.S. Treasurys — the main benchmark for mortgages, auto loans and credit card debt — moved more than 4 basis points higher to 4.696%.
The 10- and 30-year yield levels were right around the level they held before the 8:30 a.m. announcement Wednesday that Treasury would be stepping up its bond buyback program.
The yield on the 2-year Treasury note , which more closely follows short-term Federal Reserve rate decisions, was last seen up more than 2 basis points at 4.20%.
One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.
The moves underscored the difficulty of market interventions, particularly at a time when U.S. debt faces a slew of factors that have been pressuring yields higher.
In a move announced Wednesday morning, the Treasury Department, led by Secretary Scott Bessent, announced it would at least double the size of its government debt buybacks, starting Sept. 9 and running through Nov. 4.
Yields tumbled following the announcement, with the 30-year down about 10 basis points after previously hitting its highest in about 19 years, predating the global financial crisis in 2008.
However, the trade quickly unwound, with yields higher Thursday as the market digested the move, as well as the longer-term structural problems facing the fixed income market.
The interventions “belie the underlying structural challenges and do nothing to address them,” Maia Crook, senior research analyst at JPMorgan Chase, said in a client note. “While [Wednesday’s] action forced some decline in longer-dated yields, the more lasting impact is the potential for higher risk premia reflecting a Treasury Department that is intervening in the market and moving away from its ‘regular and predictable’ tenet.”
The announcement came the same day that Treasury updated the national debt total, which pushed past the $40 trillion mark. At the same time, the market has faced stiff competition from record corporate debt issuance tied to the artificial intelligence buildout, all of which has contributed to rising term premiums, or the extra yield investors demand to hold U.S. government paper.
Traders were also digesting the latest Federal Open Market Committee minutes from July, released Wednesday. Officials at the meeting indicated that higher interest rates likely would be needed if there isn’t more progress on inflation. Economic data released since the meeting have shown modest monthly price increases, though inflation remains above the Fed’s 2% target.
On Thursday, the Philadelphia Fed’s manufacturing index posted its highest reading since April 2021.
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In our case, we have a double whammy: inflation plus what will be a torrent of new issuances by companies betting the moon on AI. Nvidia alone is backstopping customers by half a trillion. That will dictate massive new issuances. With greater supply hitting the market, rates on the long end will have to increase to compete.
I think that the markets see through Bessent's maneuver.
Got into a hell of a fix. And not ONE, of them SOBs in government care.
The big shock move this week is in crypto.
Yep, it looks like lots of institutional money is flowing into bitcoin. The Clarity Act is also pushing it up. Trump is very, very pro-crypto, so I expect it to continue to go up.
Bessent is trying to do another “Operation Twist”—driving yields down on the 10 and 30 year rates, unfortunately, that drives up short term rates.
The govt officials care about as much as Aunt Edna (Imogene Coca) did when informed that her dog had pissed on her sandwich. She just shrugged and ate it (I guess figuring that it was HER own dog’s piss).
Apologies to anyone who hasn’t watched Lampoon’s “Vacation”.
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