New York —
It was a tough week for the bond market. And the US government’s attempt to help offered only temporary relief.
A global rate spike in long-dated government bonds pushed yields to multi-year highs this week, driving up borrowing costs for governments, businesses and consumers. The yield surge is largely a result of mounting investor concerns about persistent US inflation and ballooning government debt, as well as competition from corporate AI-buildout debt that is sapping demand for Treasuries.
After the 30-year US Treasury yield hit 5.34% on Tuesday – its highest level since 2007, before the global financial crisis – the Treasury Department staged an unusual intervention. On Wednesday, it said it would “at least double” the amount of older, long-dated debt it regularly buys back from investors.
Treasury Secretary Scott Bessent described the move in an interview with CNBC as part of a desire to signal to the market that “we believe that the yields don’t reflect the underlying fundamentals.” He added that he believes there’s been “a lot of misinformation” about the recent deficit growth, blaming the rise on the need to provide tariff refunds following the Supreme Court’s ruling that many of the Trump administration’s levies weren’t legal.
