Treasury Doubles Long-End Buybacks, Bitcoin Surges Past $68K
The US Treasury announced it will at least double the maximum size of liquidity-support buybacks for longer-dated nominal coupons (10- to 30-year sectors) from $2 billion to at least $4 billion per operation, effective September 9 through November 4. Long-term yields fell sharply, the dollar weakened, and Bitcoin broke a multi-week range, rising more than 6% to briefly approach $70,000—its highest since early June—while ether gained around 9%. Spot Bitcoin ETFs added $189 million the prior day, pushing August net inflows near $1 billion, and roughly $1.7–1.9 billion in shorts were liquidated.
This follows pressure on the long end of the curve, where 30-year yields had reached levels not seen since 2007 amid heavy supply and sticky inflation concerns. Standard Chartered’s Geoff Kendrick called the move “exactly the type of thing Bitcoin loves,” citing improved liquidity and four-year cycle dynamics, and projected $100,000 by year-end 2026 if $65,500 holds as support. Deutsche Bank and others framed it as an Operation Twist-style or QE-lite intervention under Treasury Secretary Bessent.
Key uncertainties include whether the expanded buybacks meaningfully ease structural supply pressures or merely delay a deeper bond-market reckoning, and how durable the crypto rally proves if funding rates stay low without building crowded longs. Markets still price a non-negligible chance of a September Fed hike, with Chair Warsh speaking at Jackson Hole later this month.
Sources: Cointelegraph, Bitcoin Magazine, The Defiant, ZeroHedge, US Treasury.
FOMC Minutes Show Hawkish Tilt on Inflation Risks from AI
Minutes from the July FOMC meeting revealed participants judged inflation risks skewed to the upside, with several citing broader price effects from AI investment. Most supported holding rates steady, though several favored a hike; many said further tightening would likely be needed if inflation did not decline. Chairman Warsh floated reducing scheduled meetings from eight to six annually to allow more data accumulation between decisions.
The July decision to hold had already surprised markets amid dissents, after which gold, Bitcoin and oil outperformed while the dollar and bonds lagged. Staff saw a slightly weaker growth outlook but similar inflation path; participants noted tariff pass-through largely complete yet highlighted persistent upside risks, including from the Iran conflict. Labor markets were described as balanced.
Tensions center on the gap between the hawkish minutes tone and subsequent softer data that had reduced hike odds, plus the backward-looking nature of the document versus rapid market moves after the Treasury buyback news. Uncertainty remains over Warsh’s reaction function and whether fewer meetings would reduce or heighten policy volatility.
Sources: ZeroHedge.
US Crude Inventories Rise 4.4 Million Barrels
EIA data showed US commercial crude stockpiles increased 4.4 million barrels in the week ending August 14, reaching 428.8 million barrels—near the five-year average—contrasting with an API report of a small draw. Gasoline inventories rose 700,000 barrels while distillates fell 1.5 million; total products supplied averaged 20.5 million bpd over four weeks, down 2.9% year-over-year. WTI and Brent still traded higher on the day.
The build comes amid ongoing geopolitical strains, including Russia’s spreading fuel rationing from Ukrainian drone strikes on refineries and questions over Middle East flows. Distillate stocks sit 13% below the five-year average, supporting some price resilience even as demand indicators soften.
Contradictions lie in the inventory build versus firm prices and elevated tanker rates; uncertainties include the duration of Russian supply disruptions and whether weaker US demand will eventually cap the complex.
Sources: OilPrice.com.