Yields also rose across other major bond markets, including Europe and Japan, as investors remained concerned about inflation, higher oil prices and the sustainability of government borrowing.
The latest $6 billion operation follows the Treasury’s original announcement that it would at least double its long-duration buybacks from their typical $2 billion size. Yields initially fell after that announcement but later reversed sharply higher.
The Treasury is effectively repurchasing longer-dated bonds while continuing to finance itself at the front end of the yield curve. That changes the maturity profile of the government’s debt but does not reduce its overall borrowing needs.
The bond-market intervention followed earlier coordinated action by the U.S. and Japan to support the Japanese yen.
Earlier this week, Treasury Secretary Scott Bessent challenged currency traders to bet against the intervention, declaring, “I am the house now.” A stronger yen is also in the U.S. government’s interest because it reduces the pressure on Japan to sell U.S. Treasuries to finance further currency intervention. Japan is the largest foreign holder of U.S. government debt.
Alongside rising Treasury yields, WTI crude has climbed to around $97 a barrel, matching its May high. The increase has added to concerns that higher energy costs could keep inflation elevated, making the Federal Reserve’s job more difficult.
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