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Bond yields head higher again, giving back almost all gains since Treasury Department intervention
Yahoo Finance • • business
Key Points:
- Despite the US Treasury's plan to double buybacks of long-term bonds, 30-year and 10-year Treasury yields rose for a second consecutive day, signaling limited effectiveness of the intervention.
- The Treasury's bond-buying operation, starting September 9 through November 4, aims to lower yields but faces headwinds from inflation concerns, Federal Reserve policy shifts, and increased corporate debt issuance.
- Analysts express skepticism that the Treasury's measures will counteract declining Fed credibility and rising rate expectations, complicating monetary policy coordination between the Treasury and the Fed.
- The Treasury's strategy involves issuing new debt to buy back old bonds, effectively reshuffling rather than reducing the national debt, which recently surpassed $40 trillion amid ongoing large deficits.
- Market experts suggest the Fed may need to adjust its target federal funds rate more aggressively due to conflicting signals from Treasury interventions and monetary policy goals.
