Treasury boosts debt buyback cap to $6 billion

Treasury boosts debt buyback cap to $6 billion

The Treasury Department announced Wednesday it will triple the maximum amount of U.S. government debt it can buy back, as part of its effort to tamp down surging bond yields.

The Treasury Department will increase its buyback limit from $2 billion to $6 billion per operation, according to its updated buyback operations schedule.

The department will repurchase government debt, specifically 10- to 20-year securities, in a 20-minute operation that will conclude at 2 p.m. EDT on Thursday.

The department initially advised it would increase its buyback limit from $2 billion to “at least” $4 billion last month, as increasing bond yields threatened elevated borrowing costs for millions of Americans.

The day before the department’s initial announcement, the 30-year Treasury bond yield surpassed 5.33 percent, its highest mark since before the 2008 financial crisis.

While not quite at that peak, the 30-year bond yield passed 5.3 percent during Wednesday trading, after the department’s announcement. The note closed at roughly 5.26 percent on Tuesday.

The yield on the 10-year Treasury bond was at more than 4.84 percent at midday Wednesday and earlier reached a 52-week high, after closing at less than 4.81 percent Tuesday. The 10- and 30-year bond yields are respectively up by roughly 70 and 45 basis points since the start of this year. Investors have fled the bond market globally because of persistent inflation, economic uncertainty driven by the Iran war and mounting government debt. The U.S. national debt crossed the $40 trillion threshold last month.

Welcome to The Hill’s Business & Economy newsletter , I’m Julia Shapero — bringing you the latest on the intersection of Wall Street and Pennsylvania Avenue.

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