U.S. Treasury yields rose for a second consecutive session on Friday, further signaling that the Treasury Department’s recent intervention to push down long-term yields has had limited effect.

During intraday trading, the 30-year Treasury yield rose about 2 basis points to 5.27%, approaching the 5.3% level that had triggered market jitters earlier this week. The 10-year yield also climbed nearly 3 basis points, breaking above 4.73%.

Intervention’s Effectiveness in Question

On Wednesday, the Treasury Department announced that it would “at least double” the scale of its buybacks of 10-year, 20-year, and 30-year Treasury securities. The following day, Treasury Secretary Scott Bessent further suggested that the buyback program could be expanded. The operation is scheduled to begin on Sept. 9 and remains in effect through Nov. 4.

However, bond-market observers remain broadly skeptical of the Treasury’s plan to lower yields by increasing long-dated buybacks. Multiple factors—including inflation concerns, changes in the Federal Reserve’s communication stance, and a wave of corporate bond issuance—have jointly pushed yields higher. A team of strategists at BNP Paribas noted in a report this week: “We believe these measures will struggle to offset the pressure from the Fed’s diminished credibility or rising rate expectations.”

Fiscal and Monetary Policies Move in Opposite Directions

The intervention has created a more complicated situation for Fed Chair Kevin Warsh, who had previously indicated that he would welcome higher yields, as they would raise borrowing costs through market channels and tighten policy without requiring the Fed to hike short-term rates on its own.

Wilmington Trust senior bond portfolio manager Wil Stith said: “The Fed and the Treasury are now essentially operating in opposite directions. I think that will require the Fed—the institution with the larger toolkit—to adjust its federal funds rate target more than it otherwise would have.”

Debt Levels and Market Skepticism

Data released by the Treasury this week showed that U.S. national debt has surpassed the $40 trillion mark—a timing that is hardly favorable for the Treasury as it tries to market its plan of “issuing new debt to buy back old debt.”

Charlie Bilello, chief market strategist at Creative Planning, noted on social media: “The Treasury calls this a ‘debt buyback,’ but they are not reducing debt. They are running massive deficits, buying back old bonds while issuing more new ones. This is debt restructuring, not debt reduction.”