US Treasury buys back $6 billion in bonds as 10-year yield reaches 5.342%

The US Treasury used its full $6 billion limit in Thursday's bond buyback, retiring older long-term debt early. The 10-year Treasury yield touched 5.342%, its highest since April 2002. Higher yields raise the cost of mortgages, business loans and federal borrowing. Bitcoin has struggled to hold its gains. Investors offered $46.4 billion in bonds, according to Treasury results. The Treasury bought $6 billion across two of 41 eligible bonds. Both bonds pay low interest and mature in 2041 and 2042. The Treasury paid about $67 and $76 for every $100 of face value, respectively. At those prices, retiring $6 billion of debt cost roughly $4.47 billion in cash. Recent buybacks fell short of the limit, Reuters reported. Those smaller purchases sparked debate over whether the program supports bond trading or targets cheap pandemic-era bonds. The Treasury expanded its long-term buybacks on August 19 from $2 billion to at least $4 billion per operation. The larger program runs from September 9 to November 4. Long-term yields had surged amid wider deficits, above-target inflation and heavy borrowing by technology firms funding artificial intelligence. Treasury Secretary Scott Bessent said the Treasury would increase its buybacks and could spend more than $4 billion per issue. A survey gauge of prices paid by US factories jumped to 77.9, while oil was near $91, according to FXEmpire. Bitcoin topped $85,000 on Wednesday after cooler PCE inflation data, the Federal Reserve's preferred price gauge. Bitcoin then traded at $84,624, up 0.9% in 24 hours, according to BeInCrypto price data. ARK Invest CEO Cathie Wood argued that a 10-year yield above 5% reflects a working market. Friday's jobs report is the next economic data release. The expanded buybacks have five weeks left to bring borrowing costs lower.