Bessent's Bond Buybacks Fail to Calm Market as Yields Rebound

Treasury Secretary Scott Bessent's efforts to calm the bond market have so far failed to yield results, with interest rates rebounding despite his announcement of a larger bond buyback program.

The yield on the 10-year Treasury note, a key benchmark for mortgage rates, rose back to 4.69% on Thursday, nearly where it stood before Bessent's surprise move to double the size of the bond buyback program from $2 billion to $4 billion per operation starting next month.

Bessent argued that the yields don't reflect underlying fundamentals and said the Treasury Department has a 'big toolkit' at its disposal, suggesting that the buyback program could be larger than initially announced.

The increase in bond yields is driven by a combination of factors, including burgeoning government debt, heavy borrowing by tech firms, and uncertainty about the Federal Reserve's commitment to fighting inflation.