Stanley Druckenmiller Says the 30-Year Treasury Bond Is "the Only Fiscal Disciplinarian We Have Left," Even After the Government Doubled Its Long-Dated Bond Buybacks to $4 Billion. Does That Signal Higher Rates for Longer?
Yields continue to rise despite Treasury's actions to push them lower.
Overview
The U.S. Treasury Department is very worried about long-term yields on government bonds. That's because rising yields are a huge headache for Uncle Sam. They make borrowing more expensive for consumers and businesses (mortgage and car loan rates are based on them) and could put a dent in economic growth. They also make it more expensive to fund the massive U.S. government national debt, which just hit $40 trillion.
That's why Treasury Secretary Scott Bessent recently made several moves to put a lid on rising yields. These included an intervention in currency markets in July to help Japan prop up the weakening yen. Treasury was worried that if Japan had to do this alone, it would have to sell some of the $1.1 trillion in Treasuries it owns, putting downward pressure on prices and sending yields higher.
Details
And in August, Bessent said Treasury will double its buybacks of longer-dated Treasuries to push prices higher and yields lower -- or at least prevent yields from rising further. He said those purchases could be as much as $4 billion.
Source
Originally published at www.fool.com.