NEW YORK — U.S. Treasury Secretary Scott Bessent's $5.19 billion buyback operation failed to arrest a broad sell-off in long-duration bonds Thursday, with the 30-year yield climbing 8 basis points to 5.37 percent, the highest level since 2007.
The 10-year benchmark yield rose to 4.95 percent, approaching the 5 percent level many strategists view as a threshold for equity market pressure. The two-year yield jumped 16 basis points to 4.58 percent, a move reflecting market expectations for higher Fed rates ahead.
Oil prices accelerated the sell-off, surging to $109 a barrel from roughly $100 the prior day. The Treasury's operation, which fell short of its announced potential outlay of up to $6 billion, encountered what the Financial Times described as a "frosty reception" from market participants.
Elias Haddad, strategist at Brown Brothers Harriman, said the intervention was insufficient: "Treasury brought a pea shooter to a tank battle." Other traders likened the effort to a water pistol.
Michael Strain, economist at the American Enterprise Institute, said Bessent's repeated attempts had failed. "Financial engineering won't overpower the force of economic fundamentals," Strain said, noting that Bessent has tried three times and lost credibility.
Subadra Rajappa, head of research at Société Générale, told the Financial Times that the core problem remains unaddressed: "The direction of the debt and deficit. Everything else is cosmetic."
The U.S. national debt has surpassed $40 trillion and is projected to reach $41 trillion by year-end. President Donald Trump's proposal to pay every adult $5,000—estimated to cost over $1 trillion and contingent on Republican control of Congress after November elections—would accelerate that trajectory further.
Annual interest payments on the national debt stand at approximately $1 trillion and are rising. Bessent previously told CNBC that current yields "don't reflect the underlying fundamentals" and touted potential savings from fraud prevention, a measure initially promoted by Elon Musk's budget cutters in early 2025 but never implemented.
