The US Treasury announced it will at least double purchases of long‑term debt, boosting buying of 10‑20 and 20‑30 year securities from $2bn to $4bn. This move comes amid strains in the $32tn Treasury market and inflation worries linked to the Iran war and rising debt.

Markets reacted swiftly: the 30-year bond yielded 5.21% after a 5.34% high earlier this year, while the 10‑year benchmark slid to 4.67%. A recent 30‑year auction hit the highest yield since 2001, and the dollar fell 0.7% on the announcement.

Analysts warned the surprise could dent Treasury credibility; Jefferies said guidance reliability was reduced. The Treasury will offset buybacks by issuing more short‑term debt, shifting borrowing toward T‑Bills and potentially raising yields on 3‑ and 6‑month bills.

Treasury Secretary Scott Bessent remains focused on keeping long‑term costs low, while investors seek an improved deficit outlook amid ongoing inflation and large US deficits.