Feds to buy up to $6 billion in Treasury bonds. Here's why.
Wall Street analysts are skeptical that the Treasury Department's bond purchases can curb yields and lower U.S. borrowing costs.
Updated on: September 9, 2026 / 5:31 PM EDT / MoneyWatch
U.S. Treasury Secretary Scott Bessent said on Wednesday that the agency will buy up to $6 billion in long-term government bonds as part of an effort to curb rising yields and ease borrowing costs.
The Treasury Department vowed last month to "at least" double its bond buybacks to $4 billion to prop up prices. Higher Treasury yields raise borrowing costs for consumers and businesses, and can also weigh on stock prices.
Government Treasury purchases reduce supply, boosting bond prices and reducing yields (Bond yields are inversely related to prices, meaning that as yields rise, bond prices fall.) Rising yields signal that investors are demanding higher returns on Treasurys.
"They are repurchasing bonds that have been around for a while and are a smaller part of the market, but the Treasury thinks this will constrain 20- to 30-year yields from rising and put downward pressure on 10-year yields too," Mike O'Rourke, chief market strategist at JonesTrading, told CBS News.
Rising U.S. government debt is the main catalyst driving up bond yields, O'Rourke added. The national debt surpassed $40 trillion in August after doubling in less than a decade.