Bond buyback targets rising Treasury yields, borrowing costs

The Treasury plans to buy up to $6 billion in long-term government bonds as it seeks to slow rising yields and ease borrowing costs.

Treasury Secretary Scott Bessent said Wednesday’s move will reduce the supply of older bonds in the market.

Because bond prices and yields move in opposite directions, buying bonds can push prices higher and yields lower.

The plan comes as the 10-year Treasury yield climbed to 4.85%, its highest level since October 2023. That yield often influences mortgage rates and other borrowing costs.

However, economists question whether the buybacks can deliver lasting relief. The US national debt topped $40 trillion in August, while the government continues to run large budget deficits that require more borrowing.

Analysts say controlling debt growth, rather than market intervention, remains key to lowering yields over time.