The US Treasury Department has significantly expanded its programme to purchase longer-dated government debt, raising liquidity-support buybacks to $6 billion, but Bitcoin’s price has shown little reaction, remaining below $78,000. The move, announced on September 9, follows a previous increase to $4 billion on August 19, as the Treasury seeks to stabilise bond markets amid rising yields.
The decision comes as 10-year Treasury yields climbed to 4.85%, with 20-year and 30-year yields reaching 5.30%, reflecting heightened investor concerns over inflation and economic growth. Analysts suggest the $6 billion buyback may fall short of expectations, with some estimates having projected figures as high as $10 billion.
Bitcoin’s muted response contrasts with its sharp rise following a similar policy shift in August, raising questions about the cryptocurrency’s sensitivity to macroeconomic signals. Market participants point to deteriorating economic data and the Federal Reserve’s potential tightening cycle as factors dampening investor appetite for riskier assets.
The Federal Reserve’s hawkish stance, underscored by statements from officials including Kevin Warsh, has added to uncertainty, with bond markets appearing to resist the Treasury’s efforts to curb yield increases. Some investors warn that sustained pressure on yields could further weigh on asset prices, including Bitcoin, if broader economic conditions worsen.
Written by Kate Harper
Economics Desk
