US Treasury Doubles Bond Buybacks to Lower Borrowing Costs

The United States Department of the Treasury announced it will at least double the size of its liquidity support buyback operations for government securities with maturities between 10 and 30 years. The program, running from September 9 through November 4, increases the maximum size of some operations from $2 billion to at least $4 billion to provide greater liquidity and lower long-term borrowing costs.

The intervention caused 30-year yields to fall as much as 10 basis points to 5.18% and 10-year yields to drop to 4.65%. This triggered a rally in precious metals, with gold prices jumping roughly 4% to clear $4,500 per ounce and platinum rising 6.14%. The market reaction persisted despite hawkish July minutes from the Federal Reserve System, which showed officials arguing for higher interest rates.

Global markets responded positively, with the S&P/ASX 200 in Australia snapping a six-session losing streak. In the U.S., equity gains were supported by strong earnings from Target and Estée Lauder, as well as positive cancer vaccine results from Moderna and Merck. Separately, President Donald Trump indicated he is considering reducing tariffs on Canadian metals from 50% to potentially 25%, causing a surge in Canadian steel shares and a decline in U.S. aluminum stocks.