The US Treasury announced on August 19 that it is raising the maximum size of its longer-dated securities buyback operations from $2 billion to at least $4 billion per operation, effective September 9. The 30-year Treasury yield climbed to approximately 5.33%, a level not touched since 2007, while the 10-year yield hovered around 4.66% to 4.72%. This move aims to support a bond market under pressure from the combination of massive federal borrowing needs, with total debt approaching $40 trillion, and a wave of corporate bond issuances by technology companies to fund artificial intelligence infrastructure projects. The dollar weakened slightly following the announcement, and this intervention marks the Treasury’s second action in three weeks, after coordinating with Japan on currency stabilization on August 1.
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