Takeaway

The presenter argues that the US Treasury's buyback announcement failed to stop bond yields from rising because the size of the program underwhelmed expectations. The market anticipated $8-10 billion in support for the illiquid long end of the curve, but the official number came in at only $6 billion, which was not enough to reassure bond traders.

What the presenter said

• Bond yields are currently at historic highs for this decade. [00:09]
• The 10-year US Treasury yield just breached 4.90%. [00:12]
• The 30-year US Treasury yield is now "comfortably above 5.30%" and trading at 5.35%. [00:16]
• The Treasury announced a buyback of off-the-run securities to provide support for the more illiquid, long end of the curve. [00:22, 00:29]
• While the plan was to buy back at least $4 billion, the official number was announced as $6 billion. [00:36, 00:51]
• This was not enough to reassure the market, which had been expecting $8 to $10 billion in support. [00:44, 00:51]
• Bond yields trended higher despite the perceived support from the buyback. [00:56]

Trade ideas

• None stated. The presenter's market view is that the announced Treasury support was insufficient to reverse the upward trend in long-end yields.

Levels and data cited

• 10-year US Treasury yield: Breached 4.90%.
• 30-year US Treasury yield: "Comfortably above" 5.30%, current at 5.35%.
• Treasury Buyback Size (Announced): $6 billion.
• Treasury Buyback Size (Market Expectation): $8-10 billion.