TREASURY DOUBLES DEBT BUYBACKS TO STABILISE BOND MARKET

The United States Treasury Department announced on Wednesday that it will more than double the size of its government debt repurchase operations over the coming months. The maximum size of buyback operations will increase from $2 billion to at least $4 billion, with the programme targeting the 10- to 30-year portion of the Treasury market. The changes will take effect on 9 September and remain in place until 4 November. Treasury Secretary Scott Bessent leads the department during the announcement.

The move follows a period of substantial pressure in fixed income markets, with yields on longer-duration debt reaching levels not seen in nearly twenty years. The 10-year Treasury note closed down 5.7 basis points to 4.647 per cent, whilst the 30-year bond fell 9 basis points to 5.196 per cent. The Treasury Department stated in a formal announcement that the increase reflects its desire to provide greater liquidity support in longer-dated sectors where it receives consistent demand from market participants. The longer-duration segment of the market has experienced reduced buying activity since late June.

Market reaction to the announcement proved immediate. Stock market futures surged following the Treasury's statement, and gold holdings reached their largest gains in six months. President Donald Trump commented on the bond market situation on Wednesday, stating he did not believe Americans should be worried about developments. The buyback programme represents a significant intervention to address what officials characterised as limited sponsorship in an important sector of the debt market.