Treasury announces $6 billion bond buyback as 10-year yield rises

The US Treasury is set to repurchase as much as $6 billion of government debt Thursday, three times the usual size of its long-dated bond buybacks as rising yields put pressure on borrowing costs.

The operation will cover older Treasury securities maturing in 10 to 20 years. Treasury previously said it would increase longer-term buybacks to at least $4 billion per operation beginning this month, with the larger purchases aimed at providing liquidity support to the long-end of the bond market.

Markets responded skeptically to the announcement. The benchmark 10-year Treasury yield climbed to its highest level since November 2023, despite the large buyback. The 30-year yield also moved higher.

Brent crude rose above $101 a barrel, extending a rally that has pushed oil above $100 for the first time since July. The latest gains have been driven by escalating US-Iran tensions and growing concerns over disruptions to oil flows, particularly through the Strait of Hormuz.

Bitcoin and gold were modestly higher at around $78,700 and $4,400, respectively. Bitcoin briefly advanced toward $79,700 earlier in the session before giving back some of its gains.

The Nasdaq slid about 0.8% to session lows as investors weighed rising energy prices, Treasury yields and the resulting inflation risks.