{"id":221356,"date":"2026-08-20T17:51:15","date_gmt":"2026-08-20T17:51:15","guid":{"rendered":"https:\/\/quixnet.net\/wpinstance\/bond-yields-fall-after-treasury-announces-surprise-move-to-ease-rising-rates-nbc-news\/"},"modified":"2026-08-20T17:51:15","modified_gmt":"2026-08-20T17:51:15","slug":"bond-yields-fall-after-treasury-announces-surprise-move-to-ease-rising-rates-nbc-news","status":"publish","type":"post","link":"https:\/\/quixnet.net\/wpinstance\/bond-yields-fall-after-treasury-announces-surprise-move-to-ease-rising-rates-nbc-news\/","title":{"rendered":"Bond yields fall after Treasury announces surprise move to ease rising rates – NBC News"},"content":{"rendered":"

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Longer-term U.S. Treasury yields dropped sharply Wednesday after the Treasury Department announced it would increase the size of its government debt repurchases by \u201cat least double\u201d in a surprise move.
The Treasury also announced that outstanding public debt had reached $40 trillion for the first time.
The yield on the 30-year Treasury bond plunged from 5.26% to as low as 5.18%. The 10-year yield, which has a heavy hand in steering consumer borrowing rates, was less affected by the announcement but still dropped from 4.68% to as low as 4.63%.
U.S. stocks also traded higher initially but faded as the day went on. The S&P 500 closed higher by 0.2%, and the Nasdaq Composite ended up just 0.16%.
The Treasury Department\u2019s announcement<\/a> effectively means the agency will be stepping in as a larger buyer of longer-term bonds, which have been selling off.
Wednesday\u2019s announcement abruptly altered the \u201ctentative buyback schedule\u201d Treasury released just two weeks ago, an unusual shift. The change will take effect Sept. 9, the agency said.
The 30-year Treasury yield hit its highest level since 2007 <\/a>last Thursday, serving only to compound the already soaring interest costs the federal government pays on the massive national debt.
On Wednesday, the Treasury Department auctioned 20-year debt at the second-highest yield since the bond was introduced in 2020.
When bonds fall, their yields rise, and consumer interest rates follow.
The announcement appears to be the latest effort by Secretary Scott Bessent to keep a lid on rates, which have been soaring this year.
Earlier this summer, the Treasury Department, along with Japan\u2019s Finance Ministry, intervened to bolster the sliding Japanese yen<\/a>. Instead of using U.S. dollars to buy more yen, however, the Treasury sold euros and used the money to buy the yen.
The move \u2014 which reportedly caught the European Central Bank by surprise<\/a> \u2014 may have been intended to dissuade Japan from selling some of the trillions of dollars in U.S. Treasury bonds it holds, which would have further driven up yields.
The broader move higher in rates this summer accelerated after Fed Chairman Kevin Warsh\u2019s most recent news conference on July 29.
The Fed has \u201ca credibility problem,\u201d KPMG chief economist Diane Swonk wrote in an Aug. 11 note<\/a>.
Warsh offered little guidance, causing the bond market to begin second-guessing the Fed\u2019s inflation-fighting resolve despite continued geopolitical tensions, trade wars and a surge in energy prices stemming from the war with Iran and the Russian invasion of Ukraine.
Asked Wednesday afternoon whether Americans should be concerned about what\u2019s happening in the bond market, President Donald Trump said, \u201cNo, I don\u2019t think so.\u201d
\u201cOur country is doing so well despite interest rates,\u201d he said, before he reiterated his long-standing demand that the Federal Reserve lower benchmark borrowing costs.
Since the war with Iran began at the end of February, surging energy prices have driven bond yields higher, especially longer-dated yields, as investors bet on higher inflation for longer.
Crude oil prices are 50% higher than they were at the start of the year, while the cost of gas domestically has risen 37% since the war started. As of Wednesday, the national average price for a gallon of unleaded gas was $4.08.
Following Wednesday\u2019s Treasury announcement, some investors and market watchers were skeptical that the move would have any lasting impact.
\u201cThe market reaction suggests that this is an important tactical move from the Treasury,\u201d said Jim Bullard, former president of the Federal Reserve Bank of St. Louis. He said on Bloomberg TV that it was \u201ca little bit unexpected.\u201d
\u201cI don\u2019t think it changes the fundamentals of big fiscal deficits and a Fed on the sidelines,\u201d Bullard added, \u201cwhich is what\u2019s driving longer-term yields higher.\u201d
Economist Mohamed El-Erian, a professor at the Wharton School at the University of Pennsylvania, said that the Treasury\u2019s announcement could help bring down mortgage rates in the \u201cshort term\u201d but that it also \u201crisks collateral damage and unintended consequences.\u201d
On Wednesday, the average 30-year fixed mortgage rate was 6.72%, according to Mortgage News Daily, down slightly from Tuesday\u2019s 6.75%.
\u201cThe effects of this financial engineering are short dated unless followed by fundamental policy adjustments,\u201d El-Erian wrote on X<\/a>.
Swonk told NBC News on Wednesday, \u201cWe\u2019re still issuing an enormous amount of debt.\u201d She noted that the size of the federal government\u2019s debt \u201chas eclipsed the size of the U.S. economy for the first time since World War II, and interest expense is soaring.\u201d
So far this fiscal year, that interest expense is nearly $1.2 trillion<\/a>.
The Federal Reserve has kept rates unchanged this year, unlike central banks in Europe and Japan, which have raised rates to try to slow inflation.
\u201cThis is NOT a debt paydown,\u201d Peter Boockvar of One Point BFG Wealth wrote of Wednesday\u2019s buyback announcement. \u201cIt is just a rearrangement of the maturity schedule of Treasuries.\u201d
Last year, during a similar Treasury bond sell-off, Bessent told Bloomberg News that <\/a>he had \u201ca big toolkit that we can roll out\u201d if needed, which included increased government debt repurchases.
Steve Kopack is a senior reporter at NBC News covering business and the economy.
© 2026 NBCUniversal Media, LLC<\/p>\n

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news AlertsThere are no new alerts at this timeLonger-term U.S. Treasury yields dropped sharply Wednesday after the Treasury Department announced it would increase the size of its government debt repurchases by \u201cat least double\u201d in a surprise move.The Treasury also announced that outstanding public debt had reached $40 trillion for the first time.The yield on […]<\/p>\n","protected":false},"author":1,"featured_media":221357,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-221356","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","entry"],"_links":{"self":[{"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/posts\/221356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/comments?post=221356"}],"version-history":[{"count":0,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/posts\/221356\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/media\/221357"}],"wp:attachment":[{"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/media?parent=221356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/categories?post=221356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/tags?post=221356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}