BIS’s bond market intervention marks a “short-lived victory,” as the US Treasury predicament reflects deeper concerns

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智通财经2026/08/24 01:21

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Last Wednesday, US Treasury Secretary Bessent announced a doubling of long-term Treasury bond buyback operations in a bid to stem a wave of selloffs that pushed 30-year yields to their highest level since 2007. The market briefly rebounded, but two days later yields returned to pre-intervention levels (the 10-year closed at 4.737%, higher than last week’s 4.695%). Analysts pointed out that the buybacks offer only temporary relief and fail to address deeper concerns—persistently high inflation, US federal debt surpassing 4 trillion dollars, a flood of bond issuance by AI companies draining liquidity, and unclear policy communication from Federal Reserve Chair Walsh.
During the intervention, investors sold US dollars and bought gold, engaging in a “currency devaluation trade.” TD Securities strategists compared current market sentiment to the period in 2011 when the US credit rating was downgraded, stating, “People are losing confidence in institutions—including the central bank, Congress, and even the Treasury itself.” Analysts warned that buybacks may create an “implicit backstop” expectation, but Bessent is likely to struggle to meet market hopes for sustained intervention.
Previously, Bessent promised to lower yields through deficit reduction and increased energy production, but neither plan has materialized. Bond market trends have already decoupled from economic fundamentals, and there is no consensus among market participants on the main driver pushing yields higher (AI bond issuance, fiscal deficit, or policy direction from Walsh have each been blamed). Investors are closely watching Walsh’s speech at Jackson Hole this Friday—if he continues to avoid specific policy statements, market patience may wear even thinner. As one analyst put it: “Bessent, being a former hedge fund manager, knows how to move markets—but the issue is his focus on short-term moves, whereas what’s needed now is a solution to long-term problems.”

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BIS’s bond market intervention marks a “short-lived victory,” as the US Treasury predicament reflects deeper concerns

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