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The U.S. Treasury Department has confirmed its intention to double its purchases of long-term government bonds to $4 billion per week starting September 9, in order to support liquidity and reduce the momentum of rising bond yields, which have pushed borrowing costs to their highest levels in years. This move comes amid growing concerns over inflation, the country’s debt nearing $40 trillion, and the deterioration of the U.S. bond market, where yields on 10-year and 30-year bonds have fallen, while short-term corporate debt issuance continues to increase, potentially impacting financing costs and economic investment. The Treasury aims to ease pressure on the bond market without directly interfering with interest rates, which are set by the Federal Reserve. This comes at a time when the global economy is struggling with rising bond yields, and worldwide borrowing costs remain elevated due to inflation and increasing risks associated with sovereign debt.
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