Ministry of Finance Doubles Long-Term Bond Buyback Volume Amid Bitcoin and US Stock Rally
The U.S. Treasury Department has doubled the purchase limit for long-term bond buybacks aimed at supporting liquidity in the 10-to-20-year and 20-to-30-year Treasury segments. The new rules, effective from September 9, will be in place for the current refunding quarter ending November 4. This move responds to sustained high activity and high-quality market offerings for longer-dated securities. The program targets older, less liquid "off-the-run" bonds to improve secondary market trading without significantly reducing overall debt, as the Treasury continues issuing new debt to fund the government.
The expansion follows a sharp rise in long-term Treasury yields, with the 30-year yield recently exceeding 5.33%, a level not seen since 2007. In immediate reaction, the 10-year yield fell about 6 basis points to around 4.647%, and the 30-year yield dropped roughly 9 basis points to around 5.196%. Market observers quickly termed the larger buybacks a "mini-QE," noting their potential to reduce the supply of long-term bonds that private investors must absorb.
Amid the yield decline, U.S. stock indices like the Dow Jones and S&P 500 traded higher, while Bitcoin rebounded to trade around $65,000, supported by spot ETF inflows and derivatives market dynamics. Lower yields can reduce the appeal of safe dollar assets, potentially supporting Bitcoin, though it faces resistance near $65,600-$66,000.
The Treasury will decide on November 4 whether to maintain, expand, or scale back the increased buyback volumes. Investors will watch for sustained high-quality bond market offerings, the trajectory of 30-year yields, and the durability of the rally in U.S. stocks and Bitcoin.
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