Yields on 30-year U.S. Treasury bonds exceeded 5.28 percent by Tuesday, erasing the brief relief that followed Treasury Secretary Scott Bessent's expanded buyback program announced Aug. 19. The rebound signals structural demand for compensation that temporary intervention cannot satisfy.
The 10-year yield climbed to approximately 4.8 percent, its highest level since January 2025. The two-year yield, which tracks Federal Reserve policy expectations, rose six basis points to 4.4 percent. Markets are pricing a roughly 70 percent probability of a Fed rate increase this month—the first since 2023.
Bessent described his buyback measures as addressing a market "out of whack" and "untethered from its fundamentals." Yet the market's rejection of that intervention suggests investors are demanding compensation for fiscal and inflation risk that policy tools cannot eliminate.
Mark Cabana, head of U.S. rates strategy at Bank of America, said: "The rates market has not been able to hold any type of significant rate decline. Investors demand the greatest compensation to extend that far out."
The pressure extended globally. Germany's 30-year yield reached its highest level since 2011. U.K. long-term rates hit levels last seen in 1998. Australian long-term bond yields set a record high on available data since 2016. A Bloomberg index tracking global sovereign debt climbed to its highest level in nearly two decades.
Bessent told CNBC this week, "I'm fine with it. The market is the market," and downplayed the selloff on Fox Business, stating, "I don't think we are in any kind of a dire situation." He has referenced a "big toolkit" at the Treasury's disposal, but the market's repricing suggests that toolkit has limited power against structural concerns about U.S. debt and inflation expectations.
