US treasury secretary hails government’s buy back of bonds a success
Summary
US Treasury Secretary Scott Bessent called the government’s large buyback of US bonds successful, despite rising bond yields reaching the highest levels in 19 years. The buyback aimed to lower borrowing costs amid inflation concerns and geopolitical tensions affecting energy prices.Key Facts
- The 10-year US Treasury bond yield hit 5.041% on Tuesday, the highest since 2007.
- Rising bond yields mean higher interest rates on loans like mortgages and credit cards.
- The US Treasury increased its bond buyback program from $2 billion to $6 billion to reduce bond yields.
- Treasury Secretary Scott Bessent described recent bond sales as the most successful in 20 years.
- The bond market is impacted by the Iran conflict, which has pushed oil prices above $108 a barrel.
- The US government intervened earlier in August to support the Japanese yen, a currency held heavily by Japan who owns many US bonds.
- Inflation in the US rose to 4.2% in May 2023 before falling to 3.4% in July and August.
- The Federal Reserve is expected to raise interest rates soon in response to persistent inflation.
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