U.S. Treasury Secretary Bessent’s decision to double planned long-dated bond buybacks for the next two months sent long-dated Treasury yields tumbling 10 basis points on Wednesday, the largest single-day decline since October 2025. The move followed a soft 20-year U.S. Treasury auction and came just days before midterm elections, underscoring the Treasury’s willingness to intervene when yields climb rapidly.
Global equities ended mixed as the S&P 500, Nasdaq and Dow each rose 0.2%, while European and U.K. benchmarks were little changed. Losses in Asia were more pronounced, with South Korea’s Kospi down 6.5%, China’s CSI 300 falling 5% and Japan’s Nikkei declining 3%. Within the S&P 500, healthcare shares led gains with a 3.5% advance, while financials lagged with a 0.6% decline.
The Treasury’s announcement triggered broad market reactions. The dollar weakened 0.8% against a basket of peers, with the Swiss franc surging nearly 2% and the USD/CHF pair posting its largest single-day drop since January at 1.7%. The Korean won was the top emerging market gainer, up 1.5%. Bitcoin rose 5%, while oil futures reached a four-week high and gold advanced 4% to an 11-week peak above $4,500 per ounce.
Minutes from the Federal Reserve’s July 28–29 policy meeting, released the same day, showed a shift toward a more hawkish stance. Several officials favored a 25-basis-point rate hike at the meeting, while many emphasized that borrowing costs may need to rise further if inflation fails to return to the Fed’s 2% target. The FOMC’s decision to hold rates steady was unanimous at 9–3.
The Treasury’s intervention marks the second instance in weeks where U.S. authorities have acted to curb rising bond yields, following coordinated yen intervention with Japan. Analysts noted the operation is temporary, does not alter the average maturity of outstanding debt and is not equivalent to quantitative easing, though it signals growing concern over market stability amid persistent inflation pressures.
