US Treasury Yields Hit Year Highs Despite Buybacks

This measure aims to cushion falling bond prices and rising interest rates, primarily targeting long-term Treasuries with maturities of 10 to 20 years.

Reporter Gil Keum-mi reported, “The US Treasury announced today, local time, that it will buy back up to $6 billion in long-term bonds.”

The 10-year Treasury yield reached 4.85% during trading, surpassing its highest level since November 2023, and the 30-year Treasury yield also broke above 5.3% during trading. This outcome, falling short of the $7-8 billion investors had anticipated, led to a sell-off in Treasuries immediately after the buyback announcement.

Reporter Gil Keum-mi conveyed the market situation, stating, “However, contrary to government expectations, the market began selling off bonds immediately after the announcement.”

As oil prices from the Middle East continue to rise, with Brent crude exceeding $100 per barrel, concerns are growing that inflation could be reignited. This is cited as a factor that exerts upward pressure on Treasury yields, offsetting the effect of buybacks. The combined effects of rising oil prices, inflation concerns, and the US fiscal deficit are making it difficult to stabilize interest rates.

Reporter Gil Keum-mi reported, “With Brent crude exceeding $100 per barrel and oil price increases from the Middle East continuing, there are concerns that inflation could be stimulated again,” emphasizing market anxiety.

These indicators are expected to significantly influence future Treasury yield movements. Additionally, the European Central Bank's (ECB) anticipated 0.25% interest rate hike and President Lagarde's remarks are key market interests.

Reporter Gil Keum-mi stated, “Amid this, the market is focusing on various inflation indicators, including the US August Producer Price Index (PPI) to be released tonight and the CPI to be announced tomorrow.”