U.S. Treasury yields have climbed back up after only a brief pullback following Treasury Secretary Bessent’s Aug. 19 announcement that the government would expand its Treasury buyback program, according to BlockBeats on Sept. 2.
The move lower in long-dated yields faded quickly. The 30-year U.S. Treasury yield has risen to 5.27%, returning to the level seen before the buyback plan was announced. The 10-year yield is hovering near 4.8%, the highest since January 2025 and more than 10 basis points above that earlier reading. The 2-year yield has climbed to 4.40%, while markets are pricing the probability of a Federal Reserve rate hike this month at about 70%.
Buyback relief fails to hold
Mark Cabana, head of U.S. rates strategy at Bank of America, said the rates market has not been able to sustain any meaningful decline in yields, with investors demanding more compensation before extending duration.
Bessent said he was not worried about the renewed rise in yields. In an interview with CNBC, he said, 「the market is the market」. Pantera founder Dan Morehead offered a sharper assessment, saying, 「for bluffing to work, nobody at the table can know you’re bluffing」.
Selling pressure spreads across sovereign debt markets
The sell-off is now showing up across global bond markets. Japan’s 10-year government bond yield has touched 3% for the first time since 1996. The U.K.’s 30-year gilt yield has risen to its highest level since 1998, while Germany’s 30-year government bond yield has reached its highest level since 2011. Bloomberg’s global sovereign bond index yield has moved to a nearly 20-year high.
Oil has risen about 13% over the past month to $94. With tensions in the Middle East still unresolved, investors have also raised their expectations for further rate hikes from the European Central Bank, the Bank of Japan, and the Reserve Bank of Australia and Reserve Bank of New Zealand.
Japan stands out
Japan’s move has been especially sharp. Its 10-year yield has risen from about 2% in January to 3%, adding to debt refinancing pressure. The report said Prime Minister Sanae Takaichi’s fiscal expansion has intensified that strain.
Higher borrowing costs are spreading wider
Florian Ielpo, a portfolio manager at Lombard Odier, said rising bond yields are making fixed income more attractive relative to equities, and that his asset-allocation view has already started to change.
This broad repricing of sovereign debt is now pushing up financing costs at every level, from the U.S. government to ordinary homebuyers and credit-card holders.