MediumIV Macro Policy & Sovereign Debt29 September 2026, Tuesday
US long-dated yield holds above 5.5% despite Treasury buybacks
Trading Economics data show the US 30-year Treasury yield rose 2 basis points to 5.57% on 29 September. The long-dated buybacks the Treasury has been expanding since 9 September failed to halt the climb.
According to Trading Economics, the 30-year yield rose to 5.57% on 29 September, while the 10-year yield slipped 1 basis point to 5.24%. The same source showed the 30-year yield at 5.56% on the morning of 30 September. It puts long-dated yields at their highest level since 2007. Trading Economics attributes the rise to 4 factors: high oil prices, large budget deficits, borrowing swollen by artificial intelligence investment and concern over long-run inflation.
Tradingkey reported on 9 September that Treasury Secretary Scott Bessent had announced a 6 billion dollar buyback operation for bonds maturing in 10–20 years. A buyback means the Treasury repurchases older bonds in the market to provide liquidity. The report said the amount was 3 times the size of regular operations, and the 30-year yield stood at 5.309% on the day of the announcement. The 30-year yield has risen by about a further 26 basis points since then. Morgan Stanley had expected around 10 billion dollars per operation; that gap limited the market's response.
Talay assessment
Bottom line
The 30-year yield holding above the 5.5% threshold shows the market is pricing the budget deficit and inflation rather than the Treasury's liquidity tools. The yield has risen a further 26 basis points since the 6 billion dollar buyback of 9 September, proving that buybacks alone are not enough. Options such as shortening issuance maturities or enlarging the buybacks may come onto the Treasury's agenda.
Likely effects
- US budgetNegative1–6 months
A 30-year yield above 5.5% raises the interest burden on refinanced debt and widens the budget deficit.
- Global bond marketsNegativeWeeks
The US longer-dated yield also sets a floor for European and Japanese bonds, lifting the global cost of borrowing at extended maturities.
- TürkiyeNegative1–6 months
Higher dollar yields at extended maturities raise the premium demanded on Türkiye's eurobond issues and the cost of rolling over external debt.
Possibilities, ranked
- 1High range persists55%
The 30-year yield stays in a 5.4–5.7% range, and the Treasury keeps its buybacks and issuance plan unchanged.
Watch: The Treasury's quarterly issuance announcement in early November
- 2New peak30%
PCE and employment data come in strong, and the 30-year yield rises above 5.7%.
Watch: PCE data on 30 September and demand at the 30-year bond auction
- 3Policy intervention15%
The Treasury enlarges buybacks or reduces issuance at extended maturities, and the yield falls below 5.4%.
Watch: A new Treasury announcement on buybacks or issuance maturities
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- US 30-year yield▲ 5.57%
- US 10-year yield▼ 5.24%
- Buyback, per operation▲ $6 billion
Historical context
US 30-year yield, last 6 months
- 115/09 · US 10-year yield hits 5.04%, its highest level since July 2007
- 216/09 · Fed raises its target range to 3.75–4.00% in its first rate hike since July 2023
- 321/09 · The Fed's Goolsbee: if inflation is coming from demand, the rate response will be sharper and front-loaded
- 423/09 · US Treasury sells $70 billion of 5-year notes at 5.033%; after hot PMIs the 10-year yield hits 5.10%, its highest since 2007
- 524/09 · US Treasury sells 44 billion dollars of 7-year notes at 5.085%: highest yield since April 1993 as indirect demand falls to 57.2%
- 625/09 · Michigan consumer sentiment at a 4-month low of 48.1, 1-year inflation expectations jump to 4.6%; US 30-year yield rises to 5.50%
- 728/09 · US ten-year Treasury yield climbs to a 19-year high