The Treasury Department has learned nothing from markets’ muted reactions to its bond price engineering schemes. Having doubled its long-end buybacks in August to at least $4 billion per operation, this week the Treasury unveiled a $6 billion operation in the 10- to 20-year sector, triple the normal size. Instead of lowering bond yields, as it was supposed to, the 10-year yield climbed to 4.85 percent, a three-year high, and the 30-year yield pushed back above 5.3 percent.

I wrote last month that unless the root causes of high yields are addressed, many of which originate in Washington, no amount of government financial engineering would help. Bond price manipulation cannot persuade markets to stop pricing government debt for excessive spending and inflation risks stemming from failed macroeconomic policies such as tariffs and the war in Iran.

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