The US Treasury doubled the cap on its long-term bond buybacks from $2 billion to $4 billion per operation starting September 9 to improve market liquidity in older bonds. Meanwhile, Fed minutes revealed three members voted for a quarter-point rate increase, keeping the policy rate between 3.50% and 3.75%. Treasury projects $739 billion in net marketable borrowing for Q3 and $628 billion for Q4, a massive volume that keeps pressure on bond yields. The 30-year Treasury yield reached 5.27% in early September, reflecting a high opportunity cost for non-yielding assets like Bitcoin. This setup pits the Fed’s restrictive monetary policy against Treasury’s debt composition management, creating an unfavorable short-term environment for Bitcoin while potentially strengthening its long-term appeal as a fiscal hedge.
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