FX.co ★ Treasury Boosts Long-Term Bond Buybacks

US Treasury yields fell sharply after the department announced a substantial expansion of its purchases of long-dated government debt. Officials said they would at least double the size of liquidity-support buyback operations targeting securities with maturities of 10 to 30 years.

The move followed a recent surge in 30-year Treasury yields to their highest level since 2007, which had stoked concerns about market liquidity and overall stability. After the announcement, yields declined across the curve, with the 30-year rate dropping as much as 9 basis points to 5.19%.

The decision underscores that Treasury officials are prepared to step in if borrowing costs rise too quickly or if liquidity conditions worsen. It also came just ahead of a $16 billion auction of new 20-year bonds, further sharpening attention on investor demand for longer-dated securities. Treasury Secretary Scott Bessent has previously described the buyback program as a key tool for addressing market dislocations and supporting liquidity.