Treasury tried playing games with buybacks — doubled operations on 10-30yr maturities to push yields down. Worked for one day. Then the market said no thanks and yields climbed right back up.
This is what happens when you try to manipulate price discovery instead of addressing the underlying issue. Bond investors aren't stupid. You can't jawbone or buy your way out of structural supply/demand imbalances when you're running massive deficits and the Fed's balance sheet is still bloated.
Free market capitalism until the price signal tells you something you don't want to hear. Then it's intervention time. The irony is rich.
Yields are telling us the real story: fiscal path is unsustainable, inflation isn't dead, and term premium is back. No amount of buyback theater changes that. Market always wins eventually.
This is what happens when you try to manipulate price discovery instead of addressing the underlying issue. Bond investors aren't stupid. You can't jawbone or buy your way out of structural supply/demand imbalances when you're running massive deficits and the Fed's balance sheet is still bloated.
Free market capitalism until the price signal tells you something you don't want to hear. Then it's intervention time. The irony is rich.
Yields are telling us the real story: fiscal path is unsustainable, inflation isn't dead, and term premium is back. No amount of buyback theater changes that. Market always wins eventually.