Citigroup is advising clients to purchase long-dated US Treasuries following the Treasury Department's announcement that it plans to "at least" double the size of its buyback program for longer-dated securities. The bank suggests this move could signal that yields have reached their peak.

Strategists led by Jason Williams anticipate that the 20-year Treasury yield will decline from its current level of approximately 5.2% to 4.9%.

The strategists noted that the Treasury's action should send a very strong signal to the market. They added that this development, combined with cooling inflation, sets the stage for a robust rally in the coming months.

They also wrote that if yields fail to stabilize by then, the Treasury could reduce the auction sizes for 20-year and/or 30-year bonds during its November refinancing announcement.

Wednesday's move implies that, at least for maturities of seven years or longer, the Treasury is unlikely to expand coupon-bearing auction sizes for the remainder of the Trump administration's term.