Treasury Buyback Boost Sends Yields Plummeting, Bitcoin Surges Past $65,000
The US Treasury Department announced it would double its long-end debt buybacks to at least $4 billion per operation, starting September 9. This move comes after the 30-year yield reached a 19-year high of 5.337% on Tuesday.
The decision aims to provide liquidity support, but traders interpreted it as a message about borrowing costs. The Treasury's program targets older, less liquid bonds with cash already held by the government.
The reaction was immediate, with the 30-year yield dropping to 5.192%, and the 10-year yield easing to 4.649%. Stocks also rallied alongside bonds, a reversal from earlier this week when bonds slammed stocks off record highs.
Jim Bianco, president of Bianco Research, argued that the bond market finally got the panic signal it had been waiting for.