US Treasury Doubles Bond Buybacks as Iran Sanctions Rise

The United States Department of the Treasury announced plans to at least double its sovereign bond buybacks to combat long-term yields that spiked to levels not seen since 2007. Treasury Secretary Scott Bessent stated the department possesses a big toolkit to address yields that do not reflect underlying fundamentals, signaling that the repurchase program could expand further. Despite these efforts, the impact was temporary, with the US 10-year Treasury yield rising to approximately 4.71% by Friday morning.

Market volatility is being driven by elevated inflation, government borrowing, and a deadlock between the United States and Iran over the reopening of the Strait of Hormuz. President Donald Trump announced stringent economic measures against Iran, while Bessent warned that Washington will impose the toughest sanctions in history on the nation. These threats contributed to a surge in crude oil prices, though prices saw a slight decline on Friday.

Global markets responded with mixed results. Wall Street indexes fell, including a 1.3% drop in the Dow Jones Industrial Average on Thursday. In Asia, markets in Seoul rose, bolstered by chipmakers Samsung and SK Hynix, the latter of which announced a $29 billion share buyback. Conversely, the Japanese Nikkei 225 and the Australian S&P/ASX 200 traded lower, reversing previous gains.