Treasury market intervention

What happened: Treasury Secretary Scott Bessent doubled Treasury buybacks to $4 billion per operation, attempting to cap rising yields. He hinted at potentially tapping $950 billion from the Treasury General Account (TGA). Despite these efforts, the 30-year yield rebounded, erasing all gains within 24 hours. Market participants remained skeptical, with prediction market traders assigning only a 44% chance that the 10-year Treasury note yield would fall below 4% by December.

Market impact: Gold and Bitcoin surged on the news, with gold rising 7% to $4,730 and Bitcoin jumping 24% to nearly $80,000. This reflected broad investor demand for scarce, supply-limited assets outside the Treasury market. Meanwhile, Treasury yields fell, and the price of gold continued its recent rally.

What to watch next: Investors should monitor the 10-year Treasury note yield, with a key level at 4%. They should also pay close attention to the TGA balance, as any significant drawdown could signal a more aggressive intervention by Bessent. Additionally, the next Federal Open Market Committee (FOMC) meeting on June 14-15 will provide insight into the Fed's stance on inflation and potential changes to its bond-buying program.