Longer-dated Treasury yields rise as Bessent's bond buyback rally fizzles out

[Zakana]

Longer-dated U.S. government bond yields steadied on Friday, as investor jitters over the Treasury Department's extended debt repurchase program and soaring national debt continue to weigh on markets.

Yields on the30-year U.S. Treasury note, the primary focus of the buyback plan, rose 1 basis point to 5.2508%.

The10-year U.S. Treasuryyield — the key benchmark for mortgages, auto loans and credit card debt — were largely unchanged at 4.7001%. The shorter-dated2-year Treasury noteyield, which more closely follows short-term Federal Reserve rate decisions, was also flat at 4.1828%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

Borrowing costsrebounded sharplyduring Thursday's session, with both the 10-year and 30-year note yield rising more than 5 basis points.

That wiped out their earlier decline, which came after Treasury Secretary Scott Bessent's bombshell intervention in the government bond market, with a ramp-up in repurchases aimed at easing pressure at the long end of the curve.

Willem Sels, global chief investment officer at HSBC Private Bank and Premier Wealth, said the rebound in long-term yields underlines market concerns that the Fed has become "less credible or predictable" under Chairman Kevin Warsh.

"We think this concern should fade as the Fed decisions are committee-based, and policy will become clearer over time. So instead, it is the supply from U.S. hyperscalers and the U.S. government that are the key concerns currently," Sels said in a note.