The US Treasury will double the maximum size of its long-term bond buyback operations from $2 billion to $4 billion per operation, starting September 9. The announcement immediately pushed 30-year Treasury yields down by 9 basis points and lifted the Dow Jones by roughly 230 points. The program targets nominal coupon securities maturing between 10 and 30 years through November 4. This move comes amid elevated yields driven by massive government deficits, the Federal Reserve’s balance sheet reduction, and selling by major foreign holders such as Japan and China. The dollar weakened following the news, as lower yields reduce the attractiveness of US debt for international investors seeking returns.
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