United States Treasury Secretary Scott Bessent’s latest intervention to steady the battered bond market has largely failed to attract investor interest, as the government conducted its second bond repurchase operation in just two weeks. Despite the effort to bolster liquidity, the anticipated demand for securities did not materialize.
The selloff intensified on Thursday, pushing the yield on the 10-year Treasury note up 5 basis points to close at 5.163%. According to Dow Jones Market Data, this marks the highest closing level for the benchmark bond since July 2007. Simultaneously, the 30-year Treasury rate climbed 5.9 basis points to 5.460%, marking its strongest point in more than two decades.
The continued rise in yields demonstrates that repurchasing debt has not succeeded in restoring confidence or curbing the sell-off among investors. As bond prices and yields move inversely, the upward pressure on rates reflects significant downward pressure on the value of existing treasuries.
This feels like déjà vu. Last time yields peaked like this, a major correction followed shortly after.
I’m skeptical. Why would investors buy back debt from the government at these rates when they can just hold cash?
Mortgage rates will just keep climbing if this continues. Everyday Americans are going to feel the squeeze soon.
Does the Treasury even have enough cash for more buybacks? The government seems to be shooting blanks here.
It is alarming that yields hit levels not seen since the 2007 financial crisis. This signals deep structural issues.