FX.co ★ US 10-Year Yield Falls from 20-Month High

The yield on the 10-year US Treasury note slipped to 4.65% on Wednesday, retreating from the 20‑month high of 4.75% reached in the previous session, after the Treasury announced it would double the size of buybacks in long‑dated securities. The move will raise the maximum size of these operations to at least $4 billion and reflects the department’s intensified efforts to rein in the recent surge in long‑term yields amid heavy AI‑related debt issuance, wider fiscal deficits, and persistent inflation risks.

Recent Treasury actions also include a joint intervention with Japan to support the yen through euro sales. Tokyo typically defends a weak currency by selling long‑term US Treasuries, so the use of euros instead is notable. In addition, Secretary Bessent has urged the Federal Reserve to expand its FIMA repo facility beyond the current $60 billion cap, which would give Japan greater access to dollar liquidity without the need to liquidate its Treasury holdings.

Investors are now awaiting the release of FOMC minutes, which could shed further light on the extent of divisions within the Federal Reserve.