Treasury Buyback Tests Bitcoin at Major Resistance
The US Treasury's buyback operation is set to begin on September 9, aiming to ease pressure in the bond market. The move comes as long-term yields have been rising despite efforts by officials to improve trading conditions.
The Treasury will at least double its maximum liquidity-support operations for 10-to-20-year and 20-to-30-year securities from $2 billion to at least $4 billion per operation, starting on September 9. This is intended to support liquidity where market participants continue to show strong demand.
The recent jobs report pushed the Fed back into the driver's seat, with nonfarm payrolls increasing by 162,000 in August and unemployment remaining at 4.1%. The result was stronger than expected, causing a shift in expectations for a rate increase at the September 16 meeting from around 49% to roughly 58%.
A stronger labour market gives the Fed less reason to rush toward easier policy, increasing yields and raising the opportunity cost of holding an asset that does not generate income. This sets up an uncomfortable scenario for Bitcoin, which is already testing $80,000 as a major resistance level.