The Treasury and Federal Reserve are steering federal borrowing toward short-term bills while capping long-end supply, after the 30-year yield hit a 19-year high. Fresh data ahead of Fed Chair Kevin Warsh's first Jackson Hole speech shows yields little changed and the dollar firmer after inflation came in slightly higher than expected.
The 30-year Treasury yield hit 5.31% on August 17, 2026, its highest level in 19 years. That rate sets a ceiling on what counts as a "risk-free" return across every other asset class, so Washington is now actively working to keep it from climbing further.
Treasury leans harder on short-term bills
Treasury Secretary Scott Bessent's department announced on August 5, 2026 that auction sizes for longer-dated nominal coupon bonds, Treasury Inflation-Protected Securities and Floating Rate Notes would stay stable for at least several quarters. Net bill supply is projected to reach $827 billion for 2026. T-bills already make up roughly 22.2% of all outstanding marketable Treasury debt as of late July, above the 15-20% range the Treasury Borrowing Advisory Committee recommends.
Starting September 9, 2026, Treasury doubled its liquidity-support buybacks of 10- to 30-year securities to at least $4 billion per operation, and the 30-year yield eased from its August peak after the announcement. The Fed, for its part, began reserve management purchases of T-bills in December 2025 to maintain what it calls "ample reserves" in the banking system. Primary dealers have flagged rollover risk, since concentrating borrowing in short-term instruments means the government must refinance more often, and on a debt load exceeding $40 trillion even a modest rate rise adds billions in annual interest costs.
Yields hold steady into Jackson Hole
Treasury yields were little changed on Thursday ahead of the Fed's Jackson Hole symposium, the first under Chair Warsh. The 10-year note was up less than a basis point at 4.672%, and the 30-year bond edged less than a basis point higher to 5.19%. Investors are watching whether Warsh addresses the rise in long-term borrowing costs or the Treasury's buyback plan in his speech.
Initial jobless claims for the week ended August 22 came in at 203,000, below the 208,000 economists expected. The data followed the Fed's preferred inflation gauge coming in slightly higher than expected on Wednesday, a print that helped boost the US dollar. Most fed funds futures traders still bet the Fed will hold rates steady in September, according to CME Group's FedWatch tool.
Sources: Crypto Briefing, CNBC
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