Treasury Buys $5.2B in Bonds as Yields Hit 4.83%
Treasury Secretary Scott Bessent defended the bond buyback program after ten-year yields spiked to 4.83%. The department purchased $5.2 billion in long-term bonds, a move that failed to halt the sell-off.
The ten-year U.S. Treasury yield reached 4.83 percent. This marked the highest level since October 2023. Treasury Secretary Scott Bessent dismissed critics of the recent intervention. He labeled them “Bloomberg Terminal Bros.” The Treasury Department bought $5.2 billion in longer-term bonds. This was below the $6 billion self-imposed limit. The purchase failed to suppress rising yields. The sell-off in the bond market continued with little interruption.
Yields spike despite intervention
Bond yields and prices move in opposite directions. A rise in yields indicates traders demand higher returns. Financial observers cite inflation from the Iran War. They also point to corporate bond issuance for AI infrastructure. The growing national debt contributes to the pressure. Bessent argued that demand remains strong. He cited two recent successful auctions. U.S. Treasuries are traditionally seen as safe assets. They often see increased interest during economic uncertainty.
Officials claim market stability
Bessent stated the United States is in good shape. He described the current situation as a supply shock. He expressed confidence in reaching the other side of the issue. The Secretary referenced his background as a hedge fund manager. He adopted a casino metaphor to describe his position. He claimed to possess asymmetric information. He stated that he is now the house. This remark raised concerns in financial circles about the nature of the intervention.
Critics question strategy effectiveness
Ryan Cummings of the Stanford Institute criticized the approach. He noted that the “Bloomberg Terminal Bros” are selling bonds. He argued this action undermines the yield curve control strategy. Paul Krugman called the strategy foolish. Krugman said Bessent is waving a tiny stick. He claimed this drains the Secretary’s credibility. The ten-year yield traded at 4.94 percent on Friday afternoon. This indicated the intervention had virtually no effect. GN auto markets/bonds: bond market data reflects this ongoing tension.
