US Treasury yields have retreated across maturities, with the 10-year falling to 4.704% in August 2025 and further to 4.031% by February 2026, as the Treasury weighs deploying up to $1 trillion from its TGA to buy bonds and extends its debt buyback program. Major banks including Barclays, RBC, and Societe Generale have cut their year-end 10-year forecasts, while markets watch Fed Chair Kevin Warsh's Jackson Hole address and a tariff court ruling.
What's driving the Treasury yield pullback across maturities, and how are Treasury ETFs responding?
The 10-year US Treasury yield fell more than 3 basis points to 4.704% on August 24, 2025, while the 30-year yield dropped more than 4 basis points to 5.234% after touching its highest level since 2007 the prior weekCITE:E1CITE:E2. Six months later, on February 23, 2026, the pullback extended: the 10-year yield fell more than 5 basis points to 4.031%, the 30-year yield fell more than 2 basis points to 4.70%, and the 2-year yield fell more than 4 basis points to 3.44%CITE:E13. Over the two months leading into the move, the 10-year yield had already declined 0.5 percentage pointsCITE:E10. The iShares 20+ Year Treasury Bond ETF (TLT) tracked the move, rising 0.37% to close at $89.74 on February 23, 2026CITE:E14.
| Date | 10-Year Yield | 30-Year Yield | 2-Year Yield | TLT ETF |
|---|
| 2025-08-24 | 4.704% (-3bp+) | 5.234% (-4bp+) | — | — |
| 2026-02-23 | 4.031% (-5bp+) | 4.70% (-2bp+) | 3.44% (-4bp+) | +0.37% to $89.74 |
What exactly is the Treasury's plan to tap the TGA for bond purchases?
The US Treasury may deploy as much as $1 trillion from its Treasury General Account (TGA) — currently holding roughly $950 billion — to purchase bondsCITE:E3. Treasury Secretary Scott Bessent also announced an extension of the department's debt buyback program, stating the goal is to ease pressure on the long end of the yield curveCITE:E4.
Why has Fed Chair Kevin Warsh's Jackson Hole address become a key market catalyst?
Central bank officials and economists are gathering this week at the annual Jackson Hole Global Central Bank Symposium, with markets focused on the keynote address from Federal Reserve (Fed) Chair Kevin WarshCITE:E5.
How has Wall Street's guiding maxim shifted from the Fed to the Treasury?
Guneet Dhingra of BNP Paribas said investors' old maxim of "don't fight the Fed" may now need to be revised to "don't fight the Treasury"CITE:E8.
How much have major Wall Street banks cut their year-end yield forecasts, and where do they diverge?
Barclays, Royal Bank of Canada (RBC), and Societe Generale have each lowered their year-end forecasts for the 10-year Treasury yield, with strategists crediting Bessent's actions for changing their outlookCITE:E9. Societe Generale's Subadra Rajappa cut her year-end 10-year yield forecast from 4.5% to 3.75%, saying the government has "built a ceiling" and that a break above 4.5% would draw a policy reactionCITE:E11. RBC's Blake Gwinn lowered his forecast from 4.75% to 4.2%CITE:E12. Questar Capital Partners' Richard Reyle said interest rates may now be the most important factor in the US economyCITE:E6.
| Bank | Prior 10-Year Forecast | Revised 10-Year Forecast |
|---|
| Societe Generale | 4.5% | 3.75% |
| RBC | 4.75% | 4.2% |
What upcoming economic data could move the bond market further?
The US is set to release the July core Personal Consumption Expenditures (PCE) price index and a revision to second-quarter GDP this weekCITE:E7. Separately, markets are watching the Producer Price Index (PPI) due February 27, 2026CITE:E19.
How could the tariff court ruling and new policy affect yield expectations?
The US Supreme Court ruled on February 20, 2026, that President Trump lacked authority to impose global tariffs under the International Emergency Economic Powers Act (IEEPA)CITE:E15. Trump responded by invoking Section 122 of the Trade Act of 1974 to impose a 15% tariff on global imports on February 21, 2026CITE:E16. Treasury Secretary Bessent said the court ruling and the new proposal together would leave 2026 tariff revenue unchangedCITE:E17. Stephen Tuckwood of Modern Wealth Management said the dollar and the 10-year Treasury yield reacted calmly to this round of tariff changes, unlike the market reaction in April 2025CITE:E18.
What this means
The Treasury's potential $1 trillion TGA drawdown and extended buyback programCITE:E3CITE:E4 coincide with Barclays, RBC, and Societe Generale cutting their 10-year forecastsCITE:E9CITE:E11CITE:E12, while the yield itself moved from 4.704% in August 2025 to 4.031% by February 2026CITE:E1CITE:E13. That sequence lines up with Dhingra's observation that market thinking has shifted from watching the Fed to watching the TreasuryCITE:E8, even as the market's reaction to the tariff reversal stayed calm compared with April 2025CITE:E18.
Author's Take・EffectStory 編輯部
The pattern here is a shift in what's actually moving the long end of the curve: Bessent's extended buyback program and the potential $1 trillion TGA drawdown — not a change in Fed policy — are what coincide with Barclays, RBC, and Societe Generale cutting their 10-year forecasts, including RBC's move from 4.75% to 4.2% and Societe Generale's from 4.5% to 3.75%. That lines up with Dhingra's read that 'don't fight the Fed' is being replaced by 'don't fight the Treasury,' and with Reyle's view that rates, not the Fed, are now the economy's most important variable. The indicator worth watching next is whether the 10-year yield tests Rajappa's stated 4.5% ceiling, or instead stays anchored near the 4.031% level already reached by February 23, 2026 — that would show whether Treasury intervention is holding the line strategists are now pricing in.