U.S. Treasury yields rise following debt buyback announcement

U.S. yields rose on Wednesday after the Treasury Department unveiled a debt buyback plan that's triple the normal amount.

The yield on the 10-year Treasury note was up more than 3 basis points at 4.839%. The benchmark rate also hit its highest level since Nov. 1, 2023, when it reached a high of 4.935%.

The 30-year Treasury bond yield was also 3 basis points higher at 5.292%. The 2-year yield — typically more sensitive to near-term policy expectations — was trading up more than 1 basis point at 4.415%.

One basis point equals 0.01%. Bond prices move inversely to yields.

Treasury Secretary Scott Bessent said the department will buy back $6 billion of longer-date government debt. The news comes after Bessent announced the operation last month, saying the Treasury would at least double debt repurchases.

Yields moved higher despite the increased buyback as some on Wall Street believed the repurchases by Bessent would be even bigger. Peter Boockvar of The Boock Report said some on Wall Street believed the buyback would be as much as $7 or $8 billion.

Yields also rose alongside oil prices. International benchmark Brent crude futures climbed above the $100-per-barrel mark for the first time since late July. U.S. West Texas Intermediate futures also extended gains on Wednesday, adding more than 3% to trade at above $96 a barrel.

The ongoing rally comes amid escalating tensions in the Middle East, with conflict continuing between the U.S. and Iran. Tehran said Wednesday its forces had struck two American vessels and eight oil tankers in the Gulf in retaliation for the U.S. destroying five Iranian crude oil tankers.

"Rates and FX markets are facing an ever more complex environment, with the risks of high energy prices spilling over more broadly in inflation terms, but in turn also increasing the risks of growing headwinds to growth, and demand destruction," Marc Ostwald chief economist and global strategist at London's ADM Investor Services, said in a Wednesday note.