Treasury yields extended their climb through the week, with the 10-year note hitting its highest level in almost three years even after the Treasury Department moved to buy back long-dated debt. Rising oil prices and looming inflation data are adding further pressure, while bitcoin holds its recent gains despite the higher-yield backdrop.
The 10-year Treasury yield touched 4.867% on Thursday, its highest level since November 2023, as traders awaited wholesale inflation data due later in the day. That move extended a surge that began a day earlier and defied a fresh government intervention meant to cool it.
Buyback fails to slow the climb
By Wednesday, the 10-year yield had already reached 4.856%, its highest since October 2023, despite the Treasury Department's announcement that it would repurchase $6 billion of long-dated government debt. The operation targeted bonds maturing in 10 to 20 years and was intended to ease upward pressure on long-term borrowing costs, but yields kept rising instead. The 30-year yield climbed above 5.3% on Wednesday. It stood at 5.315% on Thursday.
Analysts have told CoinDesk that buybacks may not succeed in pushing yields lower, since growing federal debt and additional fiscal spending are largely outside Treasury Secretary Scott Bessent's control. Bessent challenged currency traders betting against separate U.S.-Japan intervention to support the yen, saying, according to CoinDesk: "I am the house now."
Oil and inflation keep pressure on
West Texas Intermediate crude was 1.5% higher at $97.45 a barrel early Thursday, while Brent crude rose 0.9% to $102.16, as renewed hostilities between the U.S. and Iran pushed energy prices higher. The wholesale inflation report due Thursday is expected to show a 5.4% year-over-year increase for August, according to FactSet, following a 4.7% rise the prior month.
The 2-year Treasury yield, more sensitive to Fed interest rate decisions, hit 4.449%, its best level since July 2024, as markets look ahead to next week's Federal Reserve decision.
Bitcoin holds its ground
Higher bond yields are typically a headwind for bitcoin, since every dollar invested there forgoes the yield offered by Treasuries. But that dynamic mostly applies when growth is driving yields higher, and CoinDesk notes that is not the case now. Bitcoin has continued to consolidate around $78,000 after surging from roughly $63,000 in mid-August, even as the U.S. Dollar Index holds near 99.
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