Investors remained cautious after the U.S. Treasury announced a sharp increase in the size of its planned long-dated bond repurchase, with the move doing little to ease concerns over rising government debt and elevated borrowing costs, Reuters reported.The Treasury said on Wednesday it would purchase up to $6 billion of debt maturing in 10 to 20 years in its next buyback operation, triple the previous maximum of $2 billion. The amount was also above the $4 billion minimum Treasury Secretary Scott Bessent had outlined last month as part of efforts to improve liquidity in longer-dated government bonds, Reuters reported.Read more: Global Market Today: Asian stocks, bonds fall on oil, inflation concernThe buyback was scheduled for Thursday, but the larger operation failed to reassure investors who have become increasingly concerned about the U.S. government's ability to support demand for long-term Treasuries as fiscal deficits expand.The benchmark 10-year Treasury yield rose to its highest level since November 2023 following the announcement, while 20-year and 30-year yields also climbed to multi-week highs. Bond yields move inversely to prices.U.S. Treasury yields extended their gains on Thursday after data showed producer prices increased in August, while oil prices climbed above $100 a barrel, adding to concerns about inflation and the potential for tighter monetary policy.Read more: US stocks today: US stocks end lower as rising oil, Treasury yields lift Fed hike betsReuters reported that some investors had expected Treasury to announce an even larger buyback, with expectations in parts of the market reaching as high as $10 billion.Limited impact on Treasury marketThe market reaction highlighted the limitations of Treasury buybacks as a tool for controlling borrowing costs. Treasury purchases can improve liquidity in older securities and provide some support to long-end bond prices, but their overall impact remains small compared with the size of the U.S. government bond market, Reuters said.The roughly $32 trillion Treasury market means that even a $6 billion operation represents only a fraction of total outstanding debt. Analysts said the buyback therefore does little to change the broader supply-and-demand dynamics that have pushed long-term yields sharply higher in recent months.Investors are also looking for clearer signals on whether the $6 billion figure represents a ceiling for future operations or could become a starting point for larger purchases.Concerns over rising debtThe announcement comes as U.S. government debt has surpassed $40 trillion and fiscal deficits remain substantial, increasing the amount of Treasury issuance needed to finance government spending.Reuters reported that some market participants viewed Treasury's decision to actively support longer-dated bonds as a sign that policymakers may be increasingly concerned about strains in the Treasury market.The greater focus on long-term yields reflects a shift in how investors view buybacks. Initially designed primarily to improve liquidity in older Treasury securities, the programme is increasingly being watched as a possible way to reduce supply pressures in longer maturities.However, the larger buyback has so far failed to convince investors that it can materially improve the balance between supply and demand.Long-term pressures remainFor now, the market response suggests Treasury faces a significant challenge in containing long-term borrowing costs. Even a buyback three times larger than the previous maximum was insufficient to reverse the recent bond selloff.Investors are likely to focus on whether Treasury is prepared to increase purchases further if long-term yields continue to rise, or introduce additional measures to support the market.Reuters reported that analysts see buybacks as a temporary tool rather than a solution to the structural forces pushing yields higher, including persistent federal deficits, inflation pressures and increased bond issuance globally.The latest move, therefore, provides some support for liquidity but does not fundamentally change the outlook for U.S. long-term debt, leaving investors focused on the government's fiscal trajectory and the sustainability of demand for longer-dated Treasuries.Disclaimer: The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here