Forex▲ Bullish
US Yields Retest Highs. The Bessent Put Meets the Bond Vigilantes
Treasury yields pushed back up to 4.704% after the debt buyback plan. The real test is whether this signaling effort can work without a change in the structural drivers.
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US long-term yields came roaring back in the second half of the week. The bounce erased much of the drop triggered by the Treasury announcement. The 10-year yield sits at 4.704%. The 30-year is back at 5.251%.
Whether yields break higher depends on the conviction of the bond vigilantes. They may still be cautious about challenging the Bessent put this quickly. After the Wednesday announcement to double long-term debt buybacks, Treasury Secretary Bessent stepped in with some verbal intervention of his own. He said the buyback could be more than $4 billion.
It is a familiar playbook. The strategy mirrors what the Bank of Japan tried in defending the yen. Any Treasury intervention is a drop in the bucket against a $30 trillion market. The move is meant as a signaling effort. It is not a liquidity solution.