The Bond Market Is Watching The Wrong Treasury Intervention
リアクション
2026年09月08日
In this Short, David Rosenberg and Adam Taggart discuss why the bond market may be focused on the wrong Treasury intervention.
While investors are paying close attention to Treasury buybacks and attempts to contain rising yields, David believes the much bigger catalyst could arrive on November 4 with the Treasury refunding announcement.
*
The bullish case for bonds rests on two developments potentially converging at roughly the same time.
First, Fed expectations could reset. Much of the recent run-up in yields has been driven by markets shifting toward the possibility of additional Fed tightening.
David doesn’t expect the Fed to raise rates, and if those hike expectations are removed from the curve, that alone could push yields meaningfully lower and potentially produce a bull steepener.
But the bigger overlooked catalyst may come from Treasury itself.
The Fed can influence bonds through monetary policy and its role as a buyer. Treasury has another powerful lever: it is the issuer of the debt and can determine where along the yield curve that debt gets issued.
*
On November 4, Treasury could effectively introduce another form of Operation Twist through its issuance strategy — shifting more borrowing toward bills and the front end of the curve while reducing long-duration issuance.
There’s an important precedent.
Around the November 2023 Treasury refunding, the 10-year yield was near 5%. Treasury adjusted its issuance strategy, and over roughly the next three months, the 10-year yield fell about 100 basis points.
That’s why David believes the upcoming refunding could matter far more than the Treasury buyback program attracting so much attention today.
*
Treasury also has room to maneuver.
The average maturity of outstanding federal debt is currently around 60 months versus a historical average closer to 71 months.
That potentially gives Treasury flexibility to shift issuance toward shorter maturities and deliver a significant positive surprise for the long end.
*
The call isn’t for the 10-year yield to suddenly collapse back below 4%, nor does it require markets to start pricing aggressive Fed cuts.
But if Fed hike expectations fade at roughly the same time Treasury reduces long-end supply pressure, a meaningful duration rally could develop.
*
From current levels, David believes a roughly 50-basis-point rally in the 10-year note is entirely possible.
That’s why he likes 10-year and 2-year Treasuries here, while the roughly 3% real yield available farther out on the curve is also making the long bond increasingly attractive.
*
The key takeaway: everyone is watching Treasury buybacks, but the more powerful intervention may come through issuance.
November 4 and the Treasury refunding announcement could be the bond-market catalyst investors are overlooking.
#bondmarket #yields #TLT #BND
_____________________________________________
Thoughtful Money LLC is a Registered Investment Advisor Promoter.
We produce educational content geared for the individual investor. It’s important to note that this content is NOT investment advice, individual or otherwise, nor should be construed as such.
We recommend that most investors, especially if inexperienced, should consider benefiting from the direction and guidance of a qualified financial advisor registered with the U.S. Securities and Exchange Commission (SEC) or state securities regulators who can develop & implement a personalized financial plan based on a customer’s unique goals, needs & risk tolerance.
All the details on Thoughtful Money's relationship with the financial advisors it endorses, many of whom regularly appear on this program, can be found in the following documents. We highly recommend you review these documents as they cover the terms that will apply should you choose to work with one of these firms at any time after watching this video.
Thoughtful Money Disclosure Document: https://thoughtfulmoney.com/disclosure
Thoughtful Money Agreement: https://thoughtfulmoney.com/agreement
IMPORTANT NOTE: There are risks associated with investing in securities.
Investing in stocks, bonds, exchange traded funds, mutual funds, money market funds, and other types of securities involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods.
A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.
Thoughtful Money and the Thoughtful Money logo are trademarks of Thoughtful Money LLC.
Copyright © 2026 Thoughtful Money LLC. All rights reserved.
While investors are paying close attention to Treasury buybacks and attempts to contain rising yields, David believes the much bigger catalyst could arrive on November 4 with the Treasury refunding announcement.
*
The bullish case for bonds rests on two developments potentially converging at roughly the same time.
First, Fed expectations could reset. Much of the recent run-up in yields has been driven by markets shifting toward the possibility of additional Fed tightening.
David doesn’t expect the Fed to raise rates, and if those hike expectations are removed from the curve, that alone could push yields meaningfully lower and potentially produce a bull steepener.
But the bigger overlooked catalyst may come from Treasury itself.
The Fed can influence bonds through monetary policy and its role as a buyer. Treasury has another powerful lever: it is the issuer of the debt and can determine where along the yield curve that debt gets issued.
*
On November 4, Treasury could effectively introduce another form of Operation Twist through its issuance strategy — shifting more borrowing toward bills and the front end of the curve while reducing long-duration issuance.
There’s an important precedent.
Around the November 2023 Treasury refunding, the 10-year yield was near 5%. Treasury adjusted its issuance strategy, and over roughly the next three months, the 10-year yield fell about 100 basis points.
That’s why David believes the upcoming refunding could matter far more than the Treasury buyback program attracting so much attention today.
*
Treasury also has room to maneuver.
The average maturity of outstanding federal debt is currently around 60 months versus a historical average closer to 71 months.
That potentially gives Treasury flexibility to shift issuance toward shorter maturities and deliver a significant positive surprise for the long end.
*
The call isn’t for the 10-year yield to suddenly collapse back below 4%, nor does it require markets to start pricing aggressive Fed cuts.
But if Fed hike expectations fade at roughly the same time Treasury reduces long-end supply pressure, a meaningful duration rally could develop.
*
From current levels, David believes a roughly 50-basis-point rally in the 10-year note is entirely possible.
That’s why he likes 10-year and 2-year Treasuries here, while the roughly 3% real yield available farther out on the curve is also making the long bond increasingly attractive.
*
The key takeaway: everyone is watching Treasury buybacks, but the more powerful intervention may come through issuance.
November 4 and the Treasury refunding announcement could be the bond-market catalyst investors are overlooking.
#bondmarket #yields #TLT #BND
_____________________________________________
Thoughtful Money LLC is a Registered Investment Advisor Promoter.
We produce educational content geared for the individual investor. It’s important to note that this content is NOT investment advice, individual or otherwise, nor should be construed as such.
We recommend that most investors, especially if inexperienced, should consider benefiting from the direction and guidance of a qualified financial advisor registered with the U.S. Securities and Exchange Commission (SEC) or state securities regulators who can develop & implement a personalized financial plan based on a customer’s unique goals, needs & risk tolerance.
All the details on Thoughtful Money's relationship with the financial advisors it endorses, many of whom regularly appear on this program, can be found in the following documents. We highly recommend you review these documents as they cover the terms that will apply should you choose to work with one of these firms at any time after watching this video.
Thoughtful Money Disclosure Document: https://thoughtfulmoney.com/disclosure
Thoughtful Money Agreement: https://thoughtfulmoney.com/agreement
IMPORTANT NOTE: There are risks associated with investing in securities.
Investing in stocks, bonds, exchange traded funds, mutual funds, money market funds, and other types of securities involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods.
A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.
Thoughtful Money and the Thoughtful Money logo are trademarks of Thoughtful Money LLC.
Copyright © 2026 Thoughtful Money LLC. All rights reserved.
