The US Treasury has announced it is doubling its buyback of government debt. This action is intended to balance the bond market and address investor concerns regarding high inflation.
Yield rates on 10-year, 20-year, and 30-year treasury notes reached 20-year highs this week. The 30-year treasury yield specifically rose to its highest rate since 2007. This rapid increase was noted as concerning for borrowers, as major loans, including mortgages, are backed by treasuries.
Following the Treasury Department's announcement on Wednesday morning, yields dropped. The agency stated that the policy reflects its desire to provide greater liquidity support to the long-term bond market.
Annualised US inflation was reported at 3.4% in July, down from a three-year high of 4.2% in May, but nearly 1% higher than 2025 rates. Oil prices, while down from their March peak, remain higher than pre-war levels, with August prices on track to be the highest ever recorded for the month.