Markets climbed on news that the US Treasury would double its purchases of long-term bonds, after yields soared to multi-year highs.
Yields on the longest US bond pulled back from their highest levels since 2007 on the announcement, as the White House — instead of waiting for the Federal Reserve to cut rates — pushed to lower borrowing costs ahead of November’s midterms.
Analysts suggested the move was unlikely to quiet volatility in Treasurys, but “they have to try something,” a Brandywine portfolio manager told Bloomberg: “What really gets long rates lower is a slowing economy or resolution on the Iran conflict.”
The credit-fueled AI boom, which could account for one-third of US growth this year, according to ING, is also driving up borrowing costs