Treasury Department to double debt buybacks after bond yield spike

The Treasury Department on Wednesday said it will increase the maximum amount of U.S. debt it can buy back, a move met with declining bond yields and rising stocks. Starting next month, the department plans to double the maximum value of longer-dated securities, specifically in the 10-to-20-year and the 20-to-30-year sectors, that it allows itself to repurchase from $2 billion to $4 billion. The announcement comes just one day after Treasury bond yields hit their highest rate since April 2007. The change will go into effect on Sept. 9, the department said in Wednesday's announcement, noting it will provide more information about future buyback sizes at its next quarterly refunding on Nov. 4. The 30-year Treasury bond yield surpassed 5.3 percent on Tuesday, marking its highest point in more than 19 years and portending increased borrowing costs for Americans on a host of products. But the yield ticked down to more than 5.2 percent at the close of trading Tuesday. The department’s latest move sparked further decline, pushing the rate to less than 5.2 percent as of Wednesday afternoon. Stocks also rose Wednesday, with the S&P 500 up more than 24 points and the Nasdaq composite up more than 70 points at 3:30 p.m. EDT this afternoon. The Treasury Department said its decision to raise its debt buyback ceiling reflects a “desire to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants.” A significa…