Treasury yields retreat from multi-year highs after department moves to double debt repurchase program
WASHINGTON, Aug 19. Treasury yields pulled back Wednesday from multi-year highs reached earlier in the week, after the Treasury Department said it would double the size of its government debt repurchase program. The department's announcement supplied the named driver for the retreat in rates.
Key takeaways
- Treasury yields retreated Wednesday, Aug 19, from multi-year highs reached earlier in the week.
- The pullback followed the Treasury Department's announcement that it would double the size of its debt repurchase program.
- A repurchase program has the Treasury buying back its own outstanding securities ahead of maturity.
- Doubling the program withdraws more supply from the market, which lifts bond prices and compresses yields.
- The department's announcement was the named driver for the retreat in rates.
WASHINGTON, Aug 19. Treasury yields pulled back Wednesday from multi-year highs reached earlier in the week, after the Treasury Department said it would double the size of its government debt repurchase program. The department's announcement supplied the named driver for the retreat in rates.
A repurchase program has the Treasury buying back its own outstanding securities ahead of maturity. Doubling the program withdraws more supply from the market, which lifts bond prices and compresses yields. That is the sequence the Wednesday session traced, following the department's disclosure.
Yields had pressed to multi-year highs in the days before the announcement. The decision to expand the program at double its existing size addressed the supply side of the government bond market directly. The retreat on Wednesday followed the disclosure.