The U.S. Department of the Treasury repurchased $5.187 billion in long-term bonds, below the $6 billion limit.

In the first large-scale Treasury buyback operation conducted by U.S. Treasury Secretary Janet Yellen, the amount of long-dated Treasuries purchased fell short of investors’ expectations, intensifying the sell-off and pushing U.S. long-term Treasury yields to multi-year highs. On Thursday, the U.S. Treasury repurchased $518.7 million in 10- to 20-year Treasury bonds, below the previously announced maximum buyback size of $600 million. Following this operation, the yield on 10-year U.S. Treasuries rose to its highest level since 2023. Investors submitted a total of $1.05 billion in offers to sell bonds to the Treasury during this buyback. Although the Treasury is under no obligation to buy the full amount, this marks the third time out of 53 long-term buyback operations since the program was relaunched in 2024 that the maximum allowed amount was not purchased. TD Securities strategist Molly Brooks said, “This suggests the Treasury is being more selective than usual. If the Treasury wants to meet market expectations and complete the full buyback amount to suppress long-end rates, it may have to accept less attractive prices in future buybacks. At the very least, the precedent of buying 100% of the maximum amount has now been broken, which could help reset market expectations.”