Treasury yields hit 4.85% despite $6B buyback: Crypto faces fresh pressure ahead of FOMC

The last 24 hours have been a wake-up call for investors. Speculation about a rate hike at the next FOMC was already making waves across social media.

However, the latest move of the U.S. Treasury Secretary Scott Bessent may have given the market a further hawkish push.

For context, the U.S. Treasury launched a $6 billion buyback of 10- to 20-year Treasuries, nearly 3x its previous $2 billion operation.

A bigger purchase normally drives bonds higher and eases yields, but the market snapped in the opposite direction, sending the 10-year yield to 4.85% for the first time since 2023.

This poses a bigger risk to risk assets.

The reason is simple: The fact that yields are rising despite the $6 billion buyback suggests that there is still a huge selling pressure in the bond market. If this selling pressure persists, it will only lead to higher yields, and that will only make conditions for risk assets harder.

Analysts at Kobeissi Letter already expect the 10-year Treasury yield to move above 5.00% by next week.

From a technical standpoint, rising yields make capital pricier, reducing investors’ willingness to take on risk. But the key takeaway is the signal behind this move: rising Treasury yields point to increasing volatility and uncertainty in the U.S. economy.