JP Morgan strategists warned markets may view the US Treasury’s surprise effort to suppress long-term financing costs via expanded bond buybacks as lacking credibility, which could lift the term premium and Treasury yields over time. The Treasury on Wednesday said it would at least double buyback size to provide “greater liquidity support,” a move intended to lower long-term yields. JP Morgan called the measure a stopgap, noting the US is near full employment while running roughly a 6% fiscal de

JP Morgan strategists warned markets may view the US Treasury’s surprise effort to suppress long-term financing costs via expanded bond buybacks as lacking credibility, which could lift the term premium and Treasury yields over time. The Treasury on Wednesday said it would at least double buyback size to provide “greater liquidity support,” a move intended to lower long-term yields. JP Morgan called the measure a stopgap, noting the US is near full employment while running roughly a 6% fiscal deficit; strategists including Jay Barry wrote that without genuine fiscal consolidation, the market may find the action not credible and that any shift away from a “regular and predictable” debt-management posture could push term premia and yields higher. US Treasury debt has topped $40 trillion, complicating control of funding costs amid ongoing issuance. A market survey showed about 60% of respondents expect US debt conditions to worsen until a major crisis.