U.S. Treasury Secretary Bessent sought to calm concerns over Thursday’s Treasury buyback operation after the amount repurchased came in below what the market had expected. Speaking on Sept. 11, he said the U.S. Treasury market was in "very good shape" and pushed back on worries tied to a sharp rise in yields. Bessent pointed to two strong Treasury auctions held over the past few days as support for that view. He also repeated that the recent correlation between bond prices and energy prices has been unusually high. Earlier, the 2-year Treasury yield touched its highest level since 2024, while the 10-year yield climbed to its highest level since 2023. The sell-off was linked to a surge in oil prices and to the Treasury buying back fewer bonds than anticipated. The Treasury had announced on Wednesday that it planned to repurchase up to $6 billion in bonds, but the actual total on Thursday was only $5.19 billion. Bessent said the department buys bonds back only when they are cheap, adding that investors appeared more willing to keep holding longer-dated securities this time. He said the Treasury usually receives $20 billion in offers, compared with about $10 billion in this operation.
BlockBeats reported on Sept. 11 that U.S. Treasury Secretary Bessent played down market concerns after Thursday’s Treasury buyback operation came in smaller than expected, and also sought to ease worries over a sharp rise in Treasury yields.
Bessent said the U.S. Treasury market was in "very good shape." He highlighted two strong Treasury auctions held over the past few days and repeated that the recent correlation between bonds and energy prices has been unusually high.
Buyback total came in below the previously announced ceiling
Earlier, the 2-year Treasury yield reached its highest level since 2024, while the 10-year Treasury yield rose to its highest level since 2023. Factors behind the sell-off included a surge in oil prices and the Treasury buying back fewer bonds than expected.
The U.S. Treasury said on Wednesday that it planned to repurchase up to $6 billion of bonds, but the actual total bought back on Thursday was only $5.19 billion.
Bessent says holders appeared more willing to keep longer-dated securities
Bessent said, "We only buy back bonds when they are cheap." In this operation, however, bondholders appeared more willing to continue holding their longer-term securities.
He added, "Normally we would get $20 billion" in sell offers, but this time the Treasury received only about $10 billion.
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