Treasury Intervention Fails: Market Rejects Long-Term Borrowing Costs

The US Treasury Department's attempt to stabilize long-term borrowing costs has failed, and the market is now rejecting its rescue efforts. The 30-year yield closed higher than it stood before Washington intervened, rising to around 5.25 percent by Friday. This rejection comes after the Treasury announced plans to double the size of its liquidity support buyback operations in the 10-to-20 and 20-to-30 year sectors.

Silver prices have surged over 23% in a month, reaching $69.61 an ounce on Friday, just shy of $70 per ounce. The metal's rally is not attributed to the intervention's success but rather to the need for it in the first place. Analysts point out that the Treasury's actions only signal its concerns about the market.

Treasury Secretary Scott Bessent stated that operations could run past $4 billion an issue, citing weak liquidity in the 30-year sector and yields that do not reflect underlying fundamentals. This message has been interpreted as a sign of weakness rather than strength, with silver prices responding accordingly.