The "" of U.S. Treasury buybacks was fleeting, and the wave of long-term bond selling has returned, with the 30-year yield back at 5.27%, reaching the pre-intervention high.

The yield on long-term U.S. government bonds has surged again to levels not seen since Treasury Secretary Scott Bettencourt unexpectedly expanded the repurchase program last month. At that time, Bettencourt attempted to curb the rising yields through this measure, which was initially effective. However, a global sell-off quickly pushed government borrowing costs higher once more. As of Tuesday (September 1), the yield on 30-year U.S. Treasuries reached 5.27%, exactly back to the level prior to Bettencourt's announcement on August 19 about the expansion. Meanwhile, the yield on the 10-year Treasury, a key benchmark for various loan rates, has risen over 10 basis points compared to that time, hovering around 4.8%. The market movements are sending a clear message: facing investors' deep concerns about soaring federal debt and persistently high inflation, a single unexpected adjustment to repurchase plans is far from sufficient. Mark Cabana, head of U.S. rates strategy at Bank of America, stated, The interest rate market has consistently failed to maintain any significant downward movement, and investors demand a higher risk premium to be willing to extend duration. The benchmark 10-year U.S. Treasury yield has climbed to 4.80%, the highest level since January 2025 (just before Trump returned to the White House). The 2-year yield, which is most sensitive to recent Fed policy expectations, rose 6 basis points to 4.40% on Tuesday, with traders currently pricing in a roughly 70% probability that the Fed will initiate its first interest rate hike of 2023 at its meeting this month. The yield on the 30-year Treasury remains slightly below the 19-year high reached before Treasury intervention. This pressure is impacting global long-term bonds, driven fundamentally by concerns over inflation due to rising oil prices and government spending. The 30-year yield in Germany reached its highest level since 2011, while the equivalent rate in the UK climbed to levels not seen since 1998. Australia's 30-year yield hit a new high since records began in 2016, and the Bloomberg Global Sovereign Bonds Index yield has also surged to its highest point in nearly twenty years. Repurchases cannot replace the fundamental work needed to structurally lower yields. Developed markets are entering a period of higher real interest rates, driven by stronger nominal growth, a rising neutral rate, large-scale AI-related investments and productivity improvements, and increased issuance from the private sector competing with U.S. Treasuries. This creates significant headwinds for repurchase policies, said a macro strategist. Of course, this does not mean that the Treasury's efforts have been entirely ineffective. The expanded repurchase plan will officially launch on September 9, and the final scale of the bond purchase remains uncertain. The Treasury announcement only indicated that the operational scale would at least double, without specifying the exact amount. Several market indicators also suggest that, without this intervention, U.S. long-term borrowing costs could be even higher than they are now. For instance, since the announcement, U.S. Treasuries have outperformed equivalent maturity interest rate swaps, while long bond yields have increased less than those at the short end during this period. Bettencourt himself seemed unconcerned about the recent trends. He has previously characterized this action as an attempt to guide a market that had deviated from fundamentals and was running out of control back to normalcy. In a CNBC interview this week, he stated, I think it's fine; the market is the market. However, the rebound in yields precisely highlights the challenges Bettencourt faceshe has claimed that the Treasury has a vast toolbox to suppress interest rates. Lowering yields to consequently reduce mortgage and other loan rates has been a stated goal of the Trump administration since early last year. But investors point out that massive government spending, tax cuts, tariffs, and conflicts with Iran have had the opposite effect. Dan Morehead, founder and managing partner of Pantera Capital Management, told Bloomberg Television: Bluffing only works when no one at the table knows youre bluffing. I think this actually backfired.