Treasury Doubles Bond Buybacks to Tame Surging Long-Term Yields, Lifting Stocks

The U.S. Treasury Department announced Wednesday it will at least double the size of its liquidity-support debt buyback operations, targeting longer-duration securities in a surprise move aimed at reining in long-term borrowing costs that had climbed to levels not seen in nearly 20 years. Treasury Secretary Scott Bessent's intervention came just two weeks after the department published its scheduled buyback plan for the quarter.

The cap on long-dated buybacks will rise to at least $4 billion. The 30-year Treasury yield fell sharply from 5.26% to as low as 5.18% following the announcement, while the 10-year yield dropped from 4.68% to 4.64%. U.S. stocks rallied in response, with the Dow Jones Industrial Average rising roughly 230 points, the S&P 500 gaining 0.4%, and the Nasdaq Composite roughly flat, though all three major averages remained well below their recent highs.