The US Treasury made a surprise move this week, announcing it would at least double bond buybacks for longer-duration bonds. The move was designed to push long-term yields lower.
BREAKING: The US Treasury announces it will double the size long-term US government debt buybacks following the rapid surge in US Treasury yields.
Repurchases of $2 billion will now be increased to "at least" $4 billion, the US Treasury said.
The move is intended to provide…
— The Kobeissi Letter (@KobeissiLetter) August 19, 2026
The 10-year Treasury yield dropped to 4.65% after the announcement. The 30-year yield fell to 5.19%. But by early Thursday, yields had begun climbing again, with the 10-year back up to 4.68%.
Treasury Secretary Scott Bessent’s intervention helped steady markets on Wednesday. All three major US stock indexes closed in the green that session.
By Thursday morning, the picture was more mixed. Dow Jones Industrial Average futures slid 0.1%. S&P 500 futures were flat. Nasdaq 100 futures edged up 0.1%.
Deutsche Bank macro strategist Henry Allen noted the buyback increase was not large in itself. But he said it “offers a signal that officials are willing to support the long end.”
The biggest market reaction came from crypto. Bitcoin jumped more than 10% and crossed the $70,000 mark for the first time since early June.
The Treasury’s move sent the US dollar lower. The greenback was already at a three-month low and slid another 0.1% against a basket of peers Thursday morning. A weaker dollar has historically supported Bitcoin prices.
The bond intervention also raised questions about the Federal Reserve’s strategy. Fed Chairman Kevin Warsh had been allowing markets to do some of the tightening work. Bessent’s move could complicate that approach.
Walmart reported earnings Thursday that beat expectations. However, the stock dropped after the company showed slowing US sales growth.
In the background, the US national debt passed $40 trillion. That figure has more than doubled in less than a decade.
President Trump also escalated pressure on Iran. He posted on Truth Social Wednesday evening that the US plans to launch what he called an “ECONOMIC D-DAY” against Iran. He described it as “economic warfare and isolation on an unprecedented scale.”
Trump had grown frustrated over the lack of progress in reopening the Strait of Hormuz and ending the Iran conflict.
The Treasury bond rally from Wednesday showed signs of fading Thursday. Whether the buyback program provides lasting support to the bond market remains to be seen.
Investors are watching yields closely as the US heads into a period of heavy debt issuance. The dollar’s continued slide and Bitcoin’s breakout are the clearest market signals so far.
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