Treasury Buybacks Fail to Calm Bond Market

Summary

Bloomberg This Weekend discusses the Treasury's surprise increase in longer-dated debt buybacks and why the initial yield decline faded. PIMCO's Tony Crescenzi argues longer Treasury yields are near fair value around 4% and high-quality bond yields look attractive to lock in. He and Tom Keene defend dollar durability on structural dominance, while Keene warns that further FX stress would hit emerging markets hardest, with the Philippine peso near 62 called untenable. The conversation also focuses on Jackson Hole and Fed-Treasury credibility.

• Treasury doubled longer-dated buybacks; yields briefly fell then reversed on inflation and fiscal doubts.
• Crescenzi sees 10- and 30-year Treasury yields near fair value around 4% based on inflation, neutral-rate, and term-premium components.
• Crescenzi says high-quality and double-A bonds offer attractive 5-7% income with high return reliability.
• Dollar dominance remains supported by the payment system, dollar securities, and deep US capital markets.
• Keene maintains faith in the dollar despite a poor week but flags emerging-market FX stress if weakness continues.
• Philippine peso near 62 is described as untenable.
• Jackson Hole and Fed communication are in focus as Treasury takes a more active yield-management role.