[Update] U.S. Treasury Expands Buyback to 6 Billion Dollars

Three Times the Previous Size

The U.S. Department of the Treasury has expanded the size of its long-term Treasury bond buyback (early redemption) program to a maximum of 6 billion dollars, which is three times the previously planned amount, in an effort to calm rising long-term Treasury yields.

U.S. Department of the Treasury Website

According to Bloomberg and other outlets on September 9 (local time), the U.S. Treasury has set the maximum purchase size for its long-term Treasury buyback scheduled for the 10th at 6 billion dollars. This is triple the 2 billion dollars initially proposed to investors.

On August 19, the Treasury had announced plans to at least double the size of nominal Treasury buybacks of 10 to 20-year and 20 to 30-year maturities in order to stabilize the long-term Treasury market. The previous cap for long-term liquidity support buybacks was 2 billion dollars. The Treasury’s prior buyback schedule also set a 2 billion dollar limit for purchases of both 10 to 20-year and 20 to 30-year maturities.

This expansion comes amid a rapid rise in long-term U.S. Treasury yields. The yield on the 10-year Treasury reached its highest level last week since 2023, while the 30-year yield hit its highest mark since 2007 last month. Higher long-term Treasury yields are pushing up private borrowing costs—including mortgage rates—creating a burden for the U.S. economy.

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