Dollar falls after US Treasury plans more bond buybacks

Longer-dated global bond yields retreated from multi-decade highs, the dollar tumbled and gold jumped on Wednesday after the U.S. Treasury Department said it would boost liquidity support for longer-dated securities, following a broad selloff fueled by ‌fears over swelling sovereign debt.

The U.S. Treasury Department said it would double the size of liquidity support buyback operations for longer-dated nominal coupon securities ‌to at least $4 billion per operation from $2 billion.

U.S. long-dated government yields fell by as much as 10 basis points, dragging European government bond yields down too. U.S. long bonds had hit their highest in ​nearly 20 years on Tuesday, at nearly 5.34%, reflecting growing concerns about inflation and high debt.

"It goes to show a pretty strong acknowledgement from the administration that there's an inconsistent amount of demand, especially in off-the-run securities in the very back end of the Treasury curve," said Michael Lorizio, head of U.S. rates and mortgage trading at Manulife Investment Management in Boston.

The Treasury launched the buyback program in May 2024 to help improve liquidity in the $32 trillion Treasury market, with so-called off-the-run securities—older issues that trade less ‌frequently—seeing the weakest demand.

https://finance.yahoo.com/news/bond-selloff-slows-stocks-wobble-025827451.html