BESSENT downplayed market concern after Thursday’s Treasury buyback fell short
of the announced maximum and after a recent rise in U.S. Treasury yields, saying
the market is “in very good shape.” Two-year yields hit their highest levels
since 2024 and 10-year yields rose to highs not seen since 2023. He cited strong
results at two recent Treasury auctions and repeated that the correlation
between bond and energy prices is unusually high. He said the sell-off was
driven by a surge in oil prices and by the Treasury repurchasing fewer
securities than planned: the Treasury had announced buybacks of up to $6.0 bln
but bought $5.19 bln on Thursday. “We only buy when prices are cheap,” he said,
adding that holders preferred to keep long-dated paper; the Treasury typically
receives about $20.0 bln of offers to sell but this time received roughly $10.0
bln.
