Why Treasury Secretary Bessent's moves to calm the bond market haven't worked so far
U.S. Treasury Secretary Scott Bessent's efforts to stabilize the bond market through increased buybacks have failed to lower interest rates. Investors remain concerned about government debt levels and the Federal Reserve's inflation policy.
Why it matters
Rising bond yields increase borrowing costs for consumers and businesses, potentially impacting broader economic growth.
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WASHINGTON (AP) — Interest rates rebounded Thursday despite efforts by Treasury Secretary Scott Bessent to put a lid on longer-term borrowing costs, a sign Wall Street investors remain worried about burgeoning government debt, heavy borrowing by tech firms, and the Federal Reserve’s commitment to fighting inflation.
The yield on the 10-year Treasury note, a key benchmark for mortgage rates, rose back to 4.69% Thursday. That is nearly where it stood early Wednesday before Bessent surprised financial markets by announcing that Treasury would double the size of a bond buyback program starting next month to $4 billion per operation from $2 billion. The buybacks are intended to reduce the supply of 10-year to 30-year bonds and boost their prices. Yields on bonds fall when their prices rise.
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