The yield on America's longest-dated government debt has climbed back to levels last seen before Treasury Secretary Scott Bessent's unexpected expansion of a buyback program last month, a move designed to curb rising yields. That strategy provided only brief respite before the global market selloff reignited.
By Tuesday, the 30-year Treasury yield had surged past 5.28%, returning to the level recorded just before Bessent announced his initiative on August 19. The rebound sends a clear message to the world's most influential bond market: a one-off adjustment to the Treasury's repurchase plans is insufficient to soothe investors rattled by soaring national debt and persistent inflation. The 30-year yield remains near the 19-year peak established before the Treasury's intervention.
“Interest rate markets have failed to hold any meaningful decline in yields,” said Mark Cabana, head of US rates strategy at Bank of America. “Investors are demanding the highest level of compensation to extend duration that far out.”
Meanwhile, the benchmark 10-year Treasury yield has climbed to approximately 4.8%, its highest level since January 2025, shortly before President Donald Trump's return to the White House. The two-year yield, most sensitive to Federal Reserve policy, rose 6 basis points to 4.4% on Tuesday, with traders pricing in roughly a 70% probability of a rate hike at this month's central bank meeting—which would mark the first since 2023.
Pressure has also spread to long-dated bonds globally, driven by the same concerns over oil-driven inflation shocks and massive government deficits. Germany's 30-year yield touched its highest level since 2011, while the UK's equivalent maturity reached levels not seen since 1998. Australia's 30-year yield hit a record high since data collection began in 2016, and the Bloomberg Global Sovereign Bond Index yield climbed to its highest point in nearly two decades.
Bessent has dismissed these moves, previously stating his actions were intended to steer a dysfunctional market—one detached from fundamentals—back on course. “I'm fine with it,” he said in a recent interview. “Markets are markets.” He reiterated this stance on Tuesday during a Fox Business News appearance, downplaying the bond market selloff by asserting, “I don't think we're in any kind of dire situation.”
Nonetheless, the very pressures keeping US yields elevated appear to be testing Bessent, who has touted the Treasury's “big toolbox” for managing yields. Suppressing borrowing costs—and thereby lowering costs for mortgages and other loans—has been an openly stated goal of the Trump administration since early last year, even as its heavy spending, tax cuts, tariffs, and war with Iran have pushed in the opposite direction.
“Bluffing only works when nobody at the table knows you're bluffing,” said Dan Morehead, founder and managing partner of Pantera Capital Management, in an interview. “I think this is exactly counterproductive.”