NEW YORK (AP) — The U.S. Treasury Department announced on Wednesday that it will more than double the amount of U.S. government bonds it will buy back. This decision comes as bond market yields have risen significantly, with the 10-year Treasury yield recently reaching 4.70%, up from 3.97% before the onset of the Iran war in late February. The increase in yields has raised concerns about potential economic slowdowns and their impact on stock markets.
The 30-year U.S. Treasury yield has also surpassed 5%, a level not seen since 2007. In other countries, such as Japan and Germany, bond yields have also reached multi-year highs. Higher yields can lead to increased borrowing costs for governments, companies, and households, particularly affecting mortgage rates and corporate investments.
Analysts have expressed skepticism regarding the long-term effectiveness of the Treasury's buyback strategy, suggesting that it may not address the underlying issues of rising debt and deficits. U.S. Treasury Secretary Scott Bessent's move aims to stabilize long-term yields, but some analysts warn it could backfire if it fails to produce sustained results. The Federal Reserve's ability to influence longer-term yields remains limited, as these are primarily determined by investor demand in the bond market.