Source: BIT Securities

In the past two days, facing persistently high U.S. Treasury yields, U.S. Treasury Secretary Yellen stepped in to stabilize the market twice.

The first time, she announced an increase in the Treasury buyback scale to $4 billion, which garnered some market support; the second time, she hinted that "the scale could be larger," but the market completely dismissed it.

The results of the two interventions have left the market generally feeling that the expected outcomes were not achieved.

1. A Lonely Rescue: Yields Turned Around, Back to Square One

The data highlights just how awkward the situation is. Treasury yields briefly dipped under the stimulus of the news but quickly rebounded—10-year yields settled at 4.7%, and 30-year yields at 5.25%, showing almost no difference from before the interventions.

The U.S. stock market last night also surrendered: the Dow Jones fell by 1.32%, the S&P 500 by 0.87%, and the Nasdaq by 1%.

2. Why Couldn't the Interventions Work? Three Layers of Reasons

First, let's talk about scale. A buyback scale of $4 billion makes barely a sound in the entire Treasury market. The truly valuable aspect of such operations has never been the amount but the signal—it tells the market: I do not want long-term yields to rise this quickly. The problem is, the signal can only be used once; hinting for "more" the second time diminishes its marginal effect to nearly zero.

Next, consider the tools. Buybacks provide liquidity, but the current rise in yields is driven by factors beyond just liquidity—inflation expectations, budget deficits, and increased Treasury supply are all pushing upwards. Using a tool meant for clearing drains to fix load-bearing walls is naturally futile.

The final layer is confidence. The buyback is essentially a technical action that does not address the root causes of high deficits and debt issuance. Worse, it may have the opposite effect: the more frequently the Treasury intervenes, the easier it is for the market to read the anxiety behind it—if even the housekeeper can’t sit still, how sturdy can the house be?

3. The Thermometer of the U.S. Economy is Hidden in Walmart's Financial Report

In last night's trading, the seven tech giants of the U.S. stock market showed slight declines, with storage chips and optical modules fluctuating with limited changes, not very noteworthy. What deserves closer scrutiny is a traditional company almost overshadowed by the AI hype—Walmart.

This latest financial report appears attractive on the surface but feels cold inside. Second-quarter revenue and adjusted earnings per share both exceeded Wall Street expectations, and the full-year financial guidance was raised. However, the market uncovered cracks: same-store sales growth in the U.S. fell to its lowest level in over six years, and third-quarter profit outlook disappointed expectations. Concerns over slowing U.S. consumer spending quickly ignited, leading to a more than 9% intraday drop in stock price.

Walmart's financial report serves as a thermometer for ordinary American households. It indicates the following issues: high credit card interest rates, mortgage burdens, and rising prices make life difficult for the average person. If consumer spending—one of the most significant aspects of the global economy—starts to decline, this is undoubtedly not good news for the overall macroeconomic situation.

4. Save U.S. Treasuries or Save the Dollar?

Let's shift focus back to U.S. Treasuries. As long-term bonds are continually sold off, both the Treasury and the Federal Reserve find themselves in a difficult dilemma: save U.S. Treasuries or save the dollar?

To suppress long-term rates, easing is necessary, which damages the dollar's credibility; to preserve the dollar, high rates must be tolerated, causing further selling of Treasuries. Whichever option is chosen, it amounts to acknowledging to the market that the situations of both are not optimistic.

When the narrative of "weak U.S. Treasuries and falling dollars" begins to gain traction, the instinctive reaction of capital is to seek alternatives. This is precisely why both gold and "digital gold" Bitcoin have recently surged: both have risen over 10% in the past month.

5. In Conclusion

The two interventions by the Treasury lost to market confidence—investors may have realized: technical buybacks cannot fill structural gaps.

What truly deserves attention next is whether there will be further significant macro actions regarding the narratives surrounding U.S. Treasuries and the dollar.

This article is written by an external author. The views, analyses, and conclusions expressed herein are solely those of the author and do not represent the official position or investment advice of BIT (Matrixport). BIT does not provide any explicit or implicit guarantee regarding the accuracy, completeness, or timeliness of the content described herein, nor does it assume any responsibility for any direct or indirect losses arising from the use of this content. The market data, prices, and percentage changes mentioned in this article are current as of the time of publication and may have changed; please refer to real-time information for accuracy. The content herein does not constitute, nor should it be viewed as, investment advice, an offer, or a solicitation to purchase or sell any financial products or instruments. Past performance does not indicate future results; investments involve risks that may lead to loss of principal, and investors should independently assess their financial situation and risk tolerance and consult professionals when necessary.

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