Treasury to Repurchase Up to $6 Billion of 10-Year Notes and 20-Year Bonds
The U.S. Treasury announced a buyback of as much as $6 billion in longer-dated securities, prompting yields on the 10-year note and 20-year bond to rise above 4.85% and 5.3% respectively.
The Treasury Department said it will repurchase up to $6 billion of 10-year Treasury notes and 20-year bonds in a single operation scheduled for Thursday afternoon. The securities targeted mature between February 2037 and August 2046, and the buyback follows a prior commitment to conduct at least $4 billion of purchases each month through early November, double the usual $2 billion level.
Treasury officials described the program as a measure to "provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants," citing the volume of high-quality offers the agency regularly receives.
After the announcement, yields on the 10-year note climbed to above 4.85%, the highest since 2023, while the 20-year bond yield rose above 5.3%.
Matt Cole, chief executive of Strive Asset Management, told FOX Business that the buyback size is modest relative to the United States' more than $40 trillion national debt and projected annual deficits exceeding $2 trillion. He said the market is signaling that the purchases are insufficient to offset the scale of future borrowing.
Treasury Secretary Scott Bessent responded that if investors were worried about U.S. debt risk, they would shift to German or Japanese bonds, noting that the U.S. market has outperformed those alternatives.
Cole added that structural debt pressures, not individual policymakers, drive the challenges and suggested that fostering a high-growth environment is essential for the United States to maintain competitiveness, particularly as AI-related investments expand.