The U.S. Treasury's move to expand long-dated bond repurchases failed to sustain market confidence. Within less than 24 hours of the announcement, the related gains were completely erased, with long-term Treasury yields returning to pre-announcement levels, signaling notable market skepticism about the measure's actual effectiveness in reducing borrowing costs.

On Thursday in the U.S., the 30-year Treasury yield rose 6 basis points to 5.26%, returning to the level seen before Treasury Secretary Bessent announced the expanded buyback program on Wednesday. The 10-year Treasury yield climbed by a similar margin.

According to the Treasury's latest arrangement, the scale of liquidity-support repurchase operations will at least double, covering maturities ranging from 10-year to 30-year bonds. The expansion, spearheaded by Bessent, was designed to provide liquidity support for the long-end bond market and help alleviate the recent persistent upward pressure on long-term borrowing costs.

However, this boost came to an end in less than one trading session.

Institutions including Franklin Templeton, Nomura Holdings, and Barrenjoey Markets have successively issued warnings, arguing that the positive spillover effects of this buyback program on the global bond market are very limited. The expanding fiscal deficit, stubborn inflation, and supply pressures from heavy borrowing in the artificial intelligence industry have left structural upward pressure on long-end yields far from dissipating.

Franklin Templeton maintains its underweight stance on long-duration bonds. Andrew Canobi, the firm's fixed income director, noted that fiscal pressure and sticky inflation have formed a "combined force" in major developed markets, jointly pointing to higher yields and a steeper yield curve. "As long as these forces persist, I don't see much buying support emerging for the long end," he said.