Treasury Doubles Long-Dated Debt Buybacks as Yields Surge

The U.S. Treasury Department will at least double the size of buyback operations for longer-dated government securities, expanding its effort to improve trading conditions after the 30-year yield reached its highest level since 2007.

Beginning Sept. 9, Treasury will raise the maximum purchase amount from $2 billion to at least $4 billion for operations covering nominal coupon securities in the 10- to 20-year and 20- to 30-year maturity sectors. The change will remain effective through Nov. 4, when Treasury publishes its next quarterly refunding plans.

Treasury cited strong participation and the volume of high-quality securities routinely offered during longer-maturity operations. The program allows the government to repurchase older, less frequently traded “off-the-run” securities, potentially improving market liquidity and reducing differences between their prices and those of newly issued debt.

Treasury confirmed that the operational adjustment will not alter overall net debt issuance or regular auction sizing for benchmark issues. Instead, the buybacks act as a balance sheet management mechanism funded through cash reserves or short-term bill issuance, removing illiquid seasoned debt while improving price discovery across long-duration fixed income.

The announcement comes after the 30-year U.S. Treasury yield recently climbed above 5.3% amid concerns about inflation, federal deficits and heavy government and corporate borrowing. It subsequently declined nearly 10 basis points to around 5.2%, while the 10-year yield also retreated.