Lates News

The US Treasury said it will buy back up to $6bn of longer-dated government bonds on Thursday, its first such operation since Treasury Secretary Scott Bessent expanded the buyback programme in an effort to curb recent rises in borrowing costs. The buyback is capped at three times the $2bn initially signalled to investors in early August. That original plan was scrapped in a surprise announcement on August 19, when the Treasury said it would at least double the size of such operations. After the announcement, 20- to 30-year US Treasuries, the target of Thursdays buyback, extended losses, with the 30-year yield rising as high as 5.38 per cent during the session, close to a high of about 5.40 per cent earlier this month and the highest level since 2007. Facing criticism that the move amounted to market intervention that would not address underlying fiscal challenges, Bessent defended the expanded buybacks by saying he acted because he believed market prices were deviating from equilibrium levels. The Institute of International Finance warned on Wednesday that attempts to use financial engineering would not resolve underlying debt dynamics, and that interventions such as buying securities in the secondary market may provide temporary relief but do not address the structural factors driving debt growth.