$6 Billion Bond Buyback Falls Short, Long-Term Yields Surge

The US Treasury's $6 billion bond buyback plan has disappointed investors, leading to a surge in long-term yields. The yield on the benchmark 10-year Treasury note rose above 4.85%, its highest level in nearly three years, after the government announced it would buy back up to $6 billion of bonds maturing in 10 to 20 years.

The move was seen as a way to support liquidity in the bond market, but some analysts felt that the size of the buyback was too small. Financial commentator Stephen Innes wrote that the figure was 'near the lower end of the whisper range' and that investors were expecting a larger intervention.

Bond market participants have been critical of the plan, with Briefing.com analyst Patrick O'Hare calling it a 'shell game'. Others have argued that the Treasury market is too large for buybacks of this size to have a significant effect, and that the plan represents a short-term fix for deeper problems with US public finances.

The rise in yields comes as Brent crude climbed above $100 a barrel for the first time since late July, pushing up borrowing costs across the US economy. The Federal Reserve's efforts to tackle persistent inflation may also be affected by the increase in bond yields and oil prices.