US Treasury Doubles Bond Buybacks to Curb Rising Yields

The United States Department of the Treasury announced on August 19, 2026, that it will at least double the size of its liquidity support buyback operations for longer-dated nominal coupon securities. Effective from September 9 through November 4, the department increased the maximum purchase amount per operation from $2 billion to $4 billion, specifically targeting the 10- to 30-year segments of the yield curve.

The intervention followed a sharp selloff that pushed the 30-year Treasury yield to a 19-year high of 5.337%, driven by concerns over a federal debt surpassing $40 trillion and geopolitical tensions stemming from a war with Iran. Following the announcement, the 30-year yield retreated to approximately 5.18%. Treasury Secretary Scott Bessent coordinated the effort to manage borrowing costs, though some analysts characterized the move as a temporary fix that fails to address underlying deficits.

Market volatility was further influenced by Federal Reserve meeting minutes revealing that several officials favored raising interest rates to combat inflation. Simultaneously, President Donald Trump paused proposed 50% tariffs on Canadian imports for three days, contributing to a rebound in US stock markets. In the corporate sector, Moderna shares surged over 160% following positive clinical trial results for an mRNA-based cancer vaccine developed with Merck. In the housing market, the average 30-year fixed-rate mortgage fell to 6.55% APR, though pending home sales reached their lowest monthly level since January.