By David Lawder and Tatiana Bautzer
WASHINGTON/NEW YORK, Aug 19 (Reuters) - The U.S. Treasury announced on Wednesday support measures for long-duration bonds, stepping in to staunch, at least temporarily, an upward march in yields that had unnerved global investors.
The move to double buyback sizes for long-duration debt came after a major bond selloff pushed the 30-year Treasury yield to its highest level since 2007 amid worries of an imminent escalation in the U.S.-Israeli war with Iran and rising concerns over a deteriorating U.S. fiscal picture. Higher bond yields push up borrowing costs, squeezing households, companies, financial markets and the federal budget alike. Total public debt outstanding topped the $40 trillion mark on Wednesday.
"I think that this will have a huge impact on the long end," said Dan Gottlander, global head of USD and CAD swaps trading at Citi, although he added that the move might prompt the U.S. Treasury to issue more short-term debt instead.
"It does not change deficits, obviously, and if you are going to buy back the long end, you still will need to issue," said Gottlander. "They may issue more bills, or also in the five-year to 10-year sector."
#debt #yields #global
WASHINGTON/NEW YORK, Aug 19 (Reuters) - The U.S. Treasury announced on Wednesday support measures for long-duration bonds, stepping in to staunch, at least temporarily, an upward march in yields that had unnerved global investors.
The move to double buyback sizes for long-duration debt came after a major bond selloff pushed the 30-year Treasury yield to its highest level since 2007 amid worries of an imminent escalation in the U.S.-Israeli war with Iran and rising concerns over a deteriorating U.S. fiscal picture. Higher bond yields push up borrowing costs, squeezing households, companies, financial markets and the federal budget alike. Total public debt outstanding topped the $40 trillion mark on Wednesday.
"I think that this will have a huge impact on the long end," said Dan Gottlander, global head of USD and CAD swaps trading at Citi, although he added that the move might prompt the U.S. Treasury to issue more short-term debt instead.
"It does not change deficits, obviously, and if you are going to buy back the long end, you still will need to issue," said Gottlander. "They may issue more bills, or also in the five-year to 10-year sector."
#debt #yields #global
4 days ago
