The recent rise in US Treasury yields is not evidence of a loss of confidence in US government debt, nor proof that the Treasury has attempted and failed to impose yield curve control. A more persuasive explanation is that long-term yields are adjusting to stronger nominal growth, persistent fiscal stimulus, AI-led capital spending, and shifting liquidity conditions.
Three conclusions follow. First, the integrity of US Treasuries remains intact: convenience-yield measures and term premia do not point to a collapse in demand. Second, Treasury buybacks are best understood as an effort to dampen volatility and improve market functioning, not as an attempt to cap yields by changing supply. Third, the key pressure on bond markets is the widening gap between long-term yields and underlying nominal GDP growth, a gap that is unlikely to persist indefinitely.
The report therefore separates three issues that are often conflated: whether investors are losing confidence in Treasuries, whether buybacks amount to yield curve control, and whether stronger nominal growth is pulling global bond yields higher. Keeping those questions distinct is essential, because each has a different market implication.
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