(Bloomberg) -- The US Treasury tripled the initial size of its next buyback of longer-dated government debt, in an announcement that was met with initial disappointment by investors.
The Treasury Department said it will buy up to $6 billion of outstanding securities set to mature in the 10- to 20-year sector. It’s the first such operation under an expanded buybacks program that showcases Secretary Scott Bessent’s resolve to stem the recent rise in borrowing costs.
The new figure is triple the amount initially communicated to investors of $2 billion. Treasuries extended an earlier decline after the release, with the yield on 10-year notes up about 5 basis points to 4.83% as of 11:35 a.m. in New York — their highest level since 2023.
Dealers had ramped up their predictions for Thursday’s buyback operation after Bessent publicly touted the potential for purchases of over $4 billion. The Treasury chief on Tuesday reiterated that while he cannot alter the “equilibrium” price of Treasuries, his objective was to slow moves down and prevent any damaging narrative taking hold in the world’s biggest bond market.
“They tripled the amount, but the market is trading it like a disappointment because it’s not the shock and awe” investors wanted, said Steven Zeng, a strategist at Deutsche Bank AG. “It’s like Treasury created this monster that it now has to keep feeding.”