GLOBAL BONDS RALLY AFTER U.S. TREASURY EXPANDS BUYBACK SUPPORT

Developing story: Treasury buyback operations, bond yields, currency moves and equity reactions may change as investors digest the policy announcement and Federal Reserve minutes.

Global bond yields retreated Wednesday after the U.S. Treasury Department said it would expand liquidity support for longer-dated securities, easing a selloff that had pushed major-market yields toward multi-decade highs. Reuters reported that Treasury would double the size of some buyback operations for longer-dated nominal coupon securities to at least $4 billion per operation from $2 billion.

The move gave investors immediate relief after a sharp selloff driven by concern over swelling sovereign debt, inflation risk and the financing demands of the artificial intelligence buildout. U.S. long-dated yields fell by as much as 10 basis points, pulling European government yields lower as well, Reuters reported.

The 30-year U.S. Treasury yield had reached nearly 5.34 percent on Tuesday, its highest level in almost two decades. Long-end yields matter because they anchor borrowing costs across the economy, from mortgages to corporate debt to equity valuations. When they move sharply higher, they can destabilize risk assets even if short-term policy rates are unchanged.

The selloff had been fueled by several forces at once. Oil prices rose as the Strait of Hormuz remained disrupted, reviving inflation concerns. Governments are issuing heavy debt. Technology firms are borrowing heavily to finance AI data centers, power infrastructure and chips. Investors had begun demanding more compensation to hold long-duration bonds.

The Treasury buyback expansion does not solve those underlying pressures, but it can improve market functioning by adding a reliable buyer and reducing liquidity stress. That is why markets reacted positively even though the debt and inflation questions remain unresolved.

Equities also benefited. Reuters reported that Wall Street opened higher Wednesday after the retreat in yields, with healthcare stocks lifted by Moderna’s strong late-stage cancer-vaccine data and technology stocks stabilizing after a selloff. Lower yields reduce the pressure on growth stocks whose valuations depend heavily on future earnings.

The dollar weakened as yields fell, while the euro and Canadian dollar strengthened. The Canadian dollar also drew support from Trump’s temporary pause on new tariffs against Canadian goods. Currency moves showed that the bond action reached beyond the Treasury market into broader global asset allocation.

What is confirmed is that the U.S. Treasury expanded buyback support and long-dated yields fell after reaching high levels. What remains unresolved is whether the rally marks a durable stabilization or only a temporary pause in a bond-market repricing driven by deficits, inflation risk, oil and AI-related borrowing.

Fact-check date: August 19, 2026. Article type: News. Sources: Reuters; U.S. Department of the Treasury. Developing note: Treasury buyback operations, bond yields, currency moves and equity reactions may change as investors digest the policy announcement and Federal Reserve minutes.