Starting September 9, the U.S. Treasury will double their treasury buyback program, bringing purchases to roughly $5.5 billion per month. While small compared with past Fed Quantitative Easing programs, the move is providing support to the bond market.
The increase comes as Treasury yields have risen sharply, with the 30-year yield reaching its highest level in nearly 20 years and the 10-year hitting its highest level since January 2025. The larger buybacks are planned through at least November 4 and could potentially continue longer.
The purchases are also helpful as the U.S. continues issuing large amounts of debt increasing the supply and at the same time there also has been a heavy corporate bond issuance.
Overall, the increased Treasury buybacks should provide a welcome boost to the bond market and could help support liquidity and investor demand in the months ahead, which should help push mortgage rates lower.
Source : MBS Highway
By: Jon Iacono