Treasury to more than double bond buybacks as yields hit multi-year highs

Analysts caution the Treasury’s move could backfire

The U.S. Treasury Department announced on Wednesday that it will more than double the amount of U.S. government bonds it will buy back. The move is aimed at calming a bond market alarmed by rising yields and worked in getting longer-term yields lower, for now at least.

A jump in oil prices tied to the war with Iran and persistent concerns about big and growing government debts pushed bond yields worldwide to heights not reached in years and, in some cases, decades.

The bond market, normally quiet, can occasionally send warning signals loud enough to hit stock markets worldwide and even grab the attention of U.S. presidents and other world leaders. High yields drag on economies and bring downward pressure on stock markets after Wall Street hit records.

Some analysts have warned the Treasury’s move could ultimately backfire. The outlook remains uncertain.