Treasury Steps In to Support Bond Markets Amid Rising Yields

The US Treasury Department announced plans to boost buybacks of longer-dated bonds, aiming to strengthen market depth and address emerging illiquidity. The decision comes after intense pressure in debt markets earlier in the week, with the yield on the 30-year Treasury bond touching 5.31%, its highest borrowing rate since 2007.

The S&P 500 and Dow Jones Industrial Average indices ended higher on Wednesday, taking support from falling bond yields. The S&P 500 rose 0.2%, while the Nasdaq 100 lost 0.2% and the Dow Jones Industrial Average added 0.2%. The Russell 2000, which tracks stocks with small market capitalizations, rose 0.5%.

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The Treasury Department plans to double the size of its liquidity-support buyback operations for government obligations maturing between 10 and 30 years, scaling them to $4 billion or more. The move aims to address emerging illiquidity across benchmark long-dated issues.