Treasury Buyback Fails to Lower Mortgage Rates
The Treasury’s $6 billion bond buyback failed to lower yields, leaving 30-year mortgage rates above 7%.
The US Treasury’s $6 billion bond buyback failed to lower yields. The 10-year note rose to a three-year high on Thursday. Thirty-year fixed mortgage rates climbed above 7 percent. Homebuyers seeking relief found no reduction in borrowing costs.
Treasury Secretary Scott Bessent defended the program’s intent. He stated that only $10 billion in offers were received. This amount was half the typical $20 billion average. Bessent dismissed market criticism as noise.
Yields Remain Elevated
Freddie Mac reported 30-year rates at 6.76 percent. Mortgage News Daily surveys show rates exceeding 7 percent. Matthew Graham linked the rise to oil prices and inflation data. The buyback size was lower than market expectations.
Fiscal Deficit Concerns
Anthony Chan criticized the program’s effectiveness. He noted the $2.1 trillion federal budget deficit. Chan argued that reducing the deficit is impossible without major fiscal consolidation. Proposed tax cuts would increase the deficit by $1.2 trillion.
Inflation Drives Rates
Mortgage rates reflect persistent inflation pressures. The Federal Reserve is expected to raise short-term rates next week. This action supports higher long-term yields. The market remains focused on fiscal and inflation risks. GN auto markets/bonds tracked these yield movements closely.
