The US Treasury announced on August 19 that it would double the size of its liquidity support buyback operations for longer-dated Treasuries, raising the cap from $2 billion to at least $4 billion per buyback. The move caused the 30-year yield to drop 9 to 10 basis points to around 5.19%, after hitting 5.337% the day before, a level not seen since 2007. However, yields had already crept back up to the 5.24% to 5.27% range by late August. The expanded buyback program is scheduled to run from September 9 through November 4, injecting over $14 billion in incremental liquidity support. Skeptics argue that a $4 billion buyback is a rounding error in a $32 trillion market, especially as US national debt approaches $40 trillion and annual fiscal deficits run close to $2 trillion.
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