The US Treasury is stepping in to help the bond market, which has been struggling lately. They’re buying up to $50 billion worth of US bonds from now until the end of October.
Why is the Treasury doing this?
The bond market is huge, worth over $25 trillion. Lately, there’s been less interest from buyers, making things a bit shaky. The Treasury wants to make sure the market stays healthy and stable. They’re hoping to encourage dealers to buy more bonds by offering them a steady buyer.
Where’s the money coming from?
The Treasury usually uses money from its own reserves or sells new bonds to get the cash for these buybacks. This means they’ll be adding to the national debt.
What’s going on with the bond market?
Recently, there’s been less demand for US bonds, especially from foreign buyers. This has forced the government to offer higher interest rates to get people to buy them. Some people think this could be a sign that the US economy is headed for a recession.
