WASHINGTON
The U.S. Treasury Department more than doubled its bond buyback program Wednesday to address a sharp selloff in longer-dated Treasuries, with the 30-year yield topping 5 percent for the first time since 2007.
The 10-year Treasury yield climbed to 4.70 percent before settling at 4.65 percent Wednesday—up 68 basis points since late February, when the Iran conflict began. The 30-year's breach of 5 percent marked a critical technical level and signaled mounting concern over the federal government's debt servicing capacity.
The selloff was not confined to U.S. markets. Japan's 10-year government bond yield touched its highest level in nearly 30 years, while the German 10-year returned to 2011 levels, reflecting a global trend of rising real rates.
Multiple factors drove the move higher: surging oil prices tied to the Iran war, mounting concern over global sovereign debt loads, and a repricing of duration risk across fixed-income portfolios. The combination hit mortgage rates and corporate borrowing costs simultaneously. Thirty-year fixed mortgage rates climbed in lockstep with the 10-year yield, reaching near their highest levels in a year. Corporate bond spreads compressed sharply as companies faced higher refinancing costs just as capital expenditures for artificial-intelligence infrastructure accelerated.
Treasury Secretary Scott Bessent's buyback expansion—reducing the supply of outstanding bonds—represents a direct intervention to compress duration premiums and restore bid-side stability. Whether the measure proves sufficient remains unclear. Some market participants cautioned that aggressive buybacks could create technical distortions or prove insufficient against the structural forces driving yields higher.
