'Going Really Big' on Bond Buyback Would Have Been a Mistake

Dow Jones
Yesterday

1554 ET - The 10-year yield approached 4.85%, its highest level since 2023, after the Treasury announced it was buying back up to $6 billion in longer-term debt. "Some investors had bet on a much bigger shock-and-awe announcement of $10bn or even more," says Evercore ISI's Krishna Guha in a note. He says he takes some reassurance from Secretary Bessent's decision, because "going really big would have been a mistake." Guha believes the move suggests Bessent accepts a limited role for buybacks in creating some uncertainty for shorts while potentially opposing overshooting but recognizes "that the US cannot durably prevent fundamentals from dictating yields and the scale of buybacks required to try would create more problems than it he solves." He adds that staying in more limited territory avoids more turbulence for Fed chair Warsh at next week's FOMC.

 

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10