Treasury Buyback Backfires: What Rising Yields Mean for XRP
Why the Treasury's larger bond buyback did not lower yields, how the Fed's September hike fits in, and what higher bond yields mean for XRP holders.
Key takeaways
- The Treasury's buybacks work like a refinance: new bonds are sold to pay for the old ones it buys, so total borrowing does not shrink.
- Bond prices and yields move in opposite directions, so falling bond prices force Washington to pay more on every new loan.
- The Fed raised rates on September 16, 2026 by a quarter point in a unanimous 12-0 vote and signaled another hike could follow.
- At the roughly 5.2% 10-year yield cited in the video for late September, $10,000 earns about $520 a year, which competes with holding riskier assets like XRP.
- The host says the late-September breakout in Bitcoin and XRP still needs to hold, and treats a Bitcoin drop below about $75,000 as a warning sign of a possible bull trap.
The US Treasury’s attempt to calm the bond market backfired in September 2026, according to a Bullrunners video. After the Treasury announced a buyback of up to $6 billion, less than traders hoped for, the 10-year yield rose instead of falling, to about 5.2% by late September. The Fed also raised rates, adding pressure on risk assets like XRP.
Why should an XRP holder care about government bonds? The interest rate on US debt is the baseline every other investment competes against. When Washington pays more than 5% on a 10-year loan and returns your money in full, some investors decide crypto’s risk is not worth it. The video, hosted by Bullrunners’ Paul, walks through what happened and what he is watching next.
What happened to US Treasury yields in 2026?
US Treasury yields rose sharply through the summer of 2026, and the video says the reason is that buyers of long-term government debt stopped showing up. According to the video, demand for 10- to 30-year bonds weakened from late June. The host calls this a “buyer strike”: the government kept trying to borrow for 20 and 30 years, and fewer investors, governments and institutions were willing to lend at the old rates.
By August 18, the video says, the 30-year yield was the highest since April 2007.
For the basics on why this rate matters for savings and mortgages, see Bullrunners’ explainer on what a rising 10-year Treasury yield means for XRP and mortgages.
Why didn’t the Treasury buyback work?
The Treasury buyback did not lower yields because it was smaller than the market wanted and did not reduce total borrowing. The video lays out this sequence:
- August 19: Treasury Secretary Scott Bessent’s department said it would at least double its buybacks of older long-term bonds, from $2 billion each time to at least $4 billion. The video says the program would run from September 9 through November 4. The Treasury called it “liquidity support.” According to the video, the 10-year yield fell to 4.65% that day and stocks rose. The video also says that when a reporter asked President Trump whether Americans should worry about the bond market, he replied, “No, I don’t think so.”
- September 9: The Treasury said the first larger buyback would be up to $6 billion, three times its old limit. The video says this came on the same day Bessent spoke at the Republican convention in Dallas, and that traders had hoped for as much as $10 billion. The 10-year yield jumped to about 4.85%.
- September 10: The Treasury bought back $5.19 billion of bonds. By the close, the 10-year yield had climbed to 4.95%. The video says the 30-year reached 5.34%.
- Late September: The video says the 10-year yield had kept rising to about 5.2%.
The video quotes Robert Tipp, who runs global bonds at PGIM. According to the video, Tipp said the Treasury was trying to control the price of a spectacular amount of borrowing with what is, in the big scheme of things, not a major operation. The host’s summary: Washington showed up to a flood with a bucket.
Oil added to the pressure. According to the video, Brent crude, the global benchmark oil price, went back above $100 a barrel that week because of the Iran war. Higher oil feeds into the price of almost everything. Inflation is the main reason lenders demand more interest.
Why do bond prices and yields move in opposite directions?
A bond’s price and its yield move in opposite directions because the interest payment is fixed. The video gives a simple example. A bond pays $50 a year on a $1,000 loan, which is 5%. If nervous owners sell until the price falls to $900, the next buyer still collects $50 a year, but on $900. That works out to more than 5.5%.
The government has to match that higher return every time it borrows new money, and it borrows constantly. Buying back $5 billion of old bonds does nothing to change what the next lender asks for on new ones.
Is the buyback the same as printing money?
No. The video argues that the Treasury buyback is a refinance, not new money flowing into markets, and it cites the Treasury’s own borrowing estimates. It is easy to hear “the government is buying back debt” and picture 2020-style liquidity. The video says that picture is wrong here.
The Treasury expected to borrow $739 billion from private investors from July through September, and another $628 billion from October through December. A footnote to those estimates says buybacks are not expected to significantly change the borrowing totals because, in the Treasury’s words, “new issuance replaces securities that are bought back.”
According to the video, Bessent called the approach a “Treasury twist” on CNBC. That means buying back old long-term bonds with money raised by selling new short-term bonds. The host compares it to paying off one loan by taking out another, and says the bond market did not treat it as free money.
Why did the Fed raise rates in September 2026?
The Fed raised rates because inflation was running hotter than expected. Core inflation, which excludes food and energy, rose 0.3% in the month, more than forecast. Gas was about $4.30 a gallon, against $3.19 a year earlier. Diesel hit $6 for the first time. Diesel matters because it moves the trucks that stock store shelves.
On September 16, the Federal Reserve raised rates by a quarter of a percentage point, its first hike since 2023. The vote was 12-0, and the decision went against Trump’s wishes. The Fed signaled another hike could come this year. Fed Chair Kevin Warsh said the plain fact is that inflation is too high and has been for too long.
More pressure followed:
- On September 23, S&P Global’s monthly survey of US businesses showed the fastest growth in five years, with company costs rising. S&P’s economist called it a hawkish signal, which means pressure for more rate hikes.
- A University of Michigan survey showed Americans in September expected prices to rise 4.6% over the next year.
- According to the video, traders in late September put roughly a two-in-three chance on another hike at the Fed’s October meeting.
Bullrunners has looked at how past tightening cycles affected crypto in whether XRP is facing a repeat of 2022.
What does a 5.2% yield mean for XRP holders?
At the roughly 5.2% 10-year yield the video cites for late September, the government pays about $520 a year on $10,000, while XRP pays nothing simply to hold. The host notes that XRP can earn yield in a liquidity pool. He adds that this takes knowledge and careful security, and that most holders just leave their coins on an exchange.
XRP also carries far more risk than a Treasury bond. The host notes that crypto assets can fall 20%, 30%, 50% or even more than 70% over a couple of years. He says risky assets typically get sold in uncertain markets, though he believes the market is still in a bull phase. To compare what your savings actually earn after inflation and tax, see how to find your real after-tax return.
Despite the pressure from bonds and rates, crypto rallied in late September, according to the video:
| Signal | What the video reports (September 2026) |
|---|---|
| Bitcoin breakout | Rose to about $87,400 on September 21, above the $83,000 to $86,000 ceiling the video says Glassnode identified on September 9 |
| Liquidations | Close to $1 billion of bets were forcibly closed that day |
| Bitcoin ETFs | Biggest inflow day of the year on September 21 |
| XRP | Up about 8% over the week, around $1.50 in late September |
| XRP ETFs | Took in money on September 23, 24 and 25 |
The host says a skeptic would have a point in calling the move a short squeeze. Liquidated bets against Bitcoin force buying that pushes the price higher. He then points to the record Bitcoin ETF inflows the same day as a sign of real demand from investors who had been on the sidelines.
The levels the host is watching
The host frames the coming weeks as a test of whether the breakout is real or a bull trap. A bull trap is a rally that reverses and catches late buyers. These are his own chart readings, reported here as commentary, not forecasts or guidance:
- Bitcoin at $82,000: In his view, a drop back below this level would be normal.
- Bitcoin at $78,000 to $79,000: He sees this as a possible higher low. He watches it near the 10 and 20 exponential moving averages (EMAs, trend lines that give more weight to recent prices).
- Bitcoin below about $75,000: He says a lower low here would suggest a major bull trap, and that the rest of crypto would likely follow.
- XRP at about $1.40: He says XRP sits back below its prior range high from August and could pull back to this area.
- S&P 500 near 7,500: If stocks put in a lower high and break below this level, he wants to see whether crypto has truly decoupled from equities.
The host also says his bullish view could change quickly if oil, bond markets, interest rates or stocks worsen. For a broader look at how holders can think about sharp drops, see what to do if XRP drops 30%.
What to watch next
The video says the Treasury will tell the market what comes next for buybacks on November 4. The Fed’s October meeting will show whether it follows through on a second hike. The yield, price and odds figures in the video date from late September, so check current levels rather than relying on them. Beyond those dates, watch the 10-year yield, oil prices and monthly inflation data. The video ties each one to how much competition crypto faces for investors’ money. For Bitcoin and XRP, the open question is whether the September breakout holds or fades back below its range.
Frequently asked questions
Why did Treasury yields rise after the buyback?
According to the video, traders had hoped for a buyback of as much as $10 billion, and the Treasury announced only up to $6 billion. The video also explains that buybacks are paid for by selling new bonds, so they do not reduce how much the government borrows, and new lenders still demanded higher rates.
What is a Treasury buyback?
A buyback is the government using cash to buy its own older bonds from holders who want to sell. The Treasury called its program liquidity support, meaning a way to make sure anyone holding an old bond can find a buyer.
Did the Fed raise interest rates in September 2026?
Yes. On September 16 the Fed raised rates by a quarter of a percentage point in a unanimous vote, its first hike since 2023, and signaled another hike could come this year.
How do higher bond yields affect XRP?
The video argues that a safe 10-year yield near 5.2% competes with risk assets, because XRP pays nothing simply to hold and can fall sharply. The host says assets like XRP often get sold in risk-off periods, though he believes the market is still in a bull phase.
What price was XRP at in the video?
The host said XRP was around $1.50 in late September after rising about 8% over the week, and that it could pull back to about $1.40. Those are his own chart views, not forecasts from Bullrunners.
Full video transcript
From the video's captions, lightly formatted. Captions can mishear names and numbers, so check figures against the article above.
On September 9th of 2026, the same day Treasury Secretary Scott Basant walked on stage at the Republican convention in Dallas, his department announced it would buy back up to $6 billion of America's own bonds, three times the size of its last buyback. The bond market's answer was to sell, and the interest rate on the 10-year government bond jumped above 4.85%. And as of now, it's sitting at 5.2% and on an insane historic rally. This is the highest it's been since 2007, which screams uncertainty about the dollar, about inflation, and about our Treasury's ability to get this thing handled. Now, the next afternoon, the Treasury went ahead and bought the bonds anyways.
And the rate Washington has to pay went higher yet again. So, the United States government tried to hold down the price of its own debt twice in two days, and both times the people who actually buy that debt said no. That same buyer is the one deciding whether Bitcoin gets through to new all-time highs and XRP gets a bid because the Treasury paying nearly 5.2% on every single dollar is competition against crypto and risk on asset classes. At some point in time, it makes far more sense to secure guaranteed yield and 100% of your dollars back at a higher rate than it does to potentially take on the risk of assets that can dump 20, 30, 50, and even 70 plus% in a single couple years. And so, in this video, I'm going to show you why this buyback didn't work, what Washington's own statements admit about it, and what it means for the XRP you hold.
So, if you're here to build real wealth, protect what's yours, and be the one to change your family's future, be sure to hit the subscribe button and comment bullish below. Now, let's dive into the video. [music] Hello and welcome back to the Bullrunners YouTube channel. If you're new here, my name is Paul and you can find me on Twitter or x@ crypto. Now, to understand why a buyback can end with rates going up, you have to know what the bond market was doing all summer. Because starting in late June, the buyers for America's long-term debt.
We're talking the 10 to 30year bonds mostly stopped showing up. Wall Street calls that a buyer strike, which means the government kept trying to borrow for 20 and 30 years. And fewer people or sovereign nations, governments, institutions wanted to lend at those old prices and yields they were getting. And so by August 18th, the 30-year yield was the highest since April of 2007. And so when you really think about it, the last time Washington paid this much to borrow for 30 years, the housing bubble hadn't even popped yet.
And on August 19th, the Treasury Secretary, Scott Bent, had to step in. His department said it would at least double its buybacks of old long-term bonds from $2 billion each time to at least four starting September 9th and running through November 4th, the day the Treasury said it would tell the market what comes next. It called the program liquidity support, meaning a way to make sure anyone holding an old bond can always find a buyer. And a buyback is exactly what it sounds like. the government using cash to buy back its own older bonds from whoever wants to sell. And that day, the 10-year yield fell to 4.65% and stocks jumped because the market heard one thing, which was that Washington was really finally putting a floor under the price of its own debt.
And when a reporter asked Trump later that day whether Americans should be worried about the bond market, he simply said, "No, I don't think so." But the market spent the next 3 weeks working out what at least 4 billion would really mean. And whatever number Bent picked was going to decide what lending your money to Washington actually pays you. Then on September 9th, the same day that Bent was on stage at the Republican convention in Dallas, the Treasury said the first of the bigger buybacks would be up to $6 billion, three times its old limit. Traders had been hoping for as much as 10 billion. So instead of falling, the 10-year yield actually jumped to 4.85% and has continued its steady trend up to 5.2%.
Robert Tip, who runs Global Bonds at PGIM, one of the biggest bond managers in the world, said the Treasury was trying to control the price of a spectacular amount of borrowing with what is, in the big scheme of things, not a major operation. In other words, Washington showed up to a flood with a measly bucket. That week, Brent crude, the world's benchmark oil price, went back above $100 a barrel on the Iran war. And oil at $100 feeds straight into the price of everything, otherwise known as inflation, which is the one thing that makes a lender demand more interest across the board on the US dollar. That very next day, the Treasury ran the buyback and took 5.19 billion dollars of bonds off investors hands.
And by the close, the 10-year yield had climbed to 4.95%. And the 30-year all the way up to 5.34%. Now, the 30-year yield is up to a high that we haven't seen since 2004. Now, a bond's price and its yield always move in opposite directions. And one example shows why.
Say a bond pays $50 a year on a $1,000 loan. If nervous owners sell it until its price drops to $900, the next buyer still collects $50 a year. But on $900, which one works out to more than 5.5%. So Washington has to match that higher return every time it borrows new money, which it does constantly. Buying $5 billion of old bonds does nothing to what the next lender asks for on the new ones. and the next lender asked for more.
So every week those bonds kept sliding, lending your money to Washington paid a little more. And the Treasury's own paperwork explains why the buybacks were never going to stop it. Now, really quickly, just one thing because the timing matters here. If prices take off the way I think they can, the people who make money are the ones who had help before it started. inside of our Altcoin Pro Accelerator. We help people one-on-one, so we only have a few spots each month and we close the doors when they're full.
You can find that first link down in the description below. And if you're on mobile or your phone, you can click the little more button to then open up the description and click the very first link in there. Now, back to the Treasury's paperwork. Now, many people might assume this is probably like 2020 where the government was flooding the market with liquidity because it's easy to hear the Treasury is buying back debt and picture money going into the market. However, that picture is wrong because from July through September, the Treasury expected to borrow $739 billion from private investors on top of everything it already owes. and it expects to borrow another 628 billion from October through December.
A footnote at the bottom of those estimates says buybacks aren't expected to change those numbers because in the Treasury's own words, new issuance replaces securities that are bought back. Think about your own wallet for a second because that's you paying off one loan by taking out another. Bent even gave it a name on CNBC, a treasury twist, which means buying back the old long-term bonds with money raised by selling new short-term bonds. The old bond gets retired and a new one gets sold to replace it. And the 739 billion still has to come from somebody.
So, the buyback is a refinance, which is why the bond market never treated it as free money, and neither did the market. The Treasury is on its own here, paying with borrowed money. And the Federal Reserve, the central bank that sets the short-term rates on your credit card and your savings account, was just about to raise those rates. And so, it's safe to say that one of the first things that these bond buyers or lenders look at is inflation. And core inflation, which leaves out food and energy, rose 3/10en of a percent in the month, which is more than was expected.
In plain English, gas was about $4.30 a gallon against $319 a year earlier. And diesel hit $6 for the first time ever, which matters because diesel moves every truck that stocks every shelf that you buy from across the nation. On my drive back from a camping trip in Eastern Oregon midepptember, diesel was over $7 a gallon. So, if you're a lender handing over your money for 10 years, you're going to want more interest to make up for the dollars that will buy less by the time you get them back. Now, 5 days after that report on September 16th, the Fed did raise interest rates for the first time since 2023 by a quarter of a percentage point in a 12 to nothing vote against Trump's wishes.
And it signaled another hike could come this year. The Fed chair Kevin Walsh said the plain fact is that inflation is too high and has been for too long. Then on September 23rd, S&P's global monthly survey of American businesses showed the economy growing at its fastest pace in 5 years with company's own costs climbing. And the S&P's economist said that that sends a hawkish signal for interest rates, which is economist speak for more rate hikes. So the pressure kept building after that because a University of Michigan survey showed Americans in September expected prices to rise 4.6% over the next year and traders now put about a 2 and three chance on another hike at the Fed's next meeting in October.
So think about what a 10-year yield around 5.2% means for your own money. Say you've got $10,000. the government would pay you about $520 a year on it, while your XRP pays you nothing to hold it, unless of course you're earning a yield by putting it in a liquidity pool. But that still requires knowledge, knowhow, and proper security measures. Most people don't do that. They just hold it on a random exchange.
Still, XRP also carries more risk than the dollar. And so often in a risky environment, those assets get sold off. I'm not saying it's going to right now because I do believe we are in a bull market. But that is typically the case. And so back on September 9th, Glass Node, the onchain data firm, drew a ceiling for Bitcoin between $83 and $86,000, the price where a lot of people who bought higher would finally be back to break even and where you'd find out whether real buyers were still around or not.
On September 21st, 5 days after the Fed's hike, Bitcoin went through that ceiling to about $87,400 and it broke the string of lower highs it had been stuck in since October of 2025. Now, the smartest doubter watching this would say that that was a short squeeze. And he'd have a point because close to a billion dollars of bets got forced shut that day or liquidated. Most of those bets on lower prices never occurred and instead they were wrong. And when a bet like that gets closed or liquidated, the exchange buys Bitcoin to close it, which pushes the price up even higher, whether anyone thought it was possible or not.
That same day, investors put more money into Bitcoin ETFs, which are exchangeraded funds or the funds you buy in a normal brokerage account that actually hold the coin for you, than on any other day this year. And this means there was demand from people and institutional players sitting on the sidelines. Then XRP came along for that same ride, up about 8% over the week, currently sitting about a buck 50. And the XRP ETFs took money in as well September 23rd, 24th, and 25th. And so I believe that XRP is likely going to follow Bitcoin in this breakout for a new high.
It is still very much possible that this is a bull trap, especially because we are seeing the bond market scream to new lows as there are less and less buyers of American or USbased debt. And so if Bitcoin breaks back down below $82,000, that is totally fine and likely natural and normal. I just don't want to see a lower low below $75,000 on any serious time frame because that would confirm that this is possibly a major bull trap and the rest of the crypto market will follow as we see the equities market also start to sell off. And so what I'm watching for is a strong bounce off of either 82,000 or a new higher low where Bitcoin potentially lands around 79 to $78,000. Either way, I'd be watching it closer to that 10 and 20 EMA.
As you can see here, even though we broke below that 20 EMA right here for a bear trap in a major rally, the 10 stayed above the 20, which is the green line above this orange line. And I believe that if Bitcoin pulls back into these ranges right here, it's a good time to buy the dip. But I wouldn't hold it all the way below 74. And if this did occur, it's likely going to carry over into XRP. XRP is currently back below its prior range high right over here on that first move and short squeeze which happened in August and could very easily pull back to about a$140 this upcoming week.
Ultimately, my biggest concerns are the fact that interest rates have increased and are likely going to continue to increase, putting pressure on our economy and money. We're also seeing bond investors put pressure on the Treasury and the US government as we see the 10-year yield rise to new local highs and highs we haven't seen since 2004, as well as the 30-year bond raising to new all-time highs above 2007 levels, which really screams that something is wrong. And so if we see this carry over into the S&P 500 or the stock market and the stock market puts in a new lower high here and starts breaking back below $7,500. This is going to be an interesting time to watch what happens to crypto. Did crypto truly decouple from the equities and stock market or was this just a major bull trap where we break back down for new local lows?
And if so, I believe a lot of people are going to get trapped and wrecked here. So, it's extremely important you manage your risk and know exactly what you're doing at a crucial time like this because this one breakout does tell me that the bare market is over. But we need to see a sustained rally to the upside. We don't want to immediately see a second week where we pull back below this breakout high range because if anything then this would just be a major bull trap and wreck a lot of bullish investors. And so if you want to stay tuned in to our live technical analysis Tuesday calls, you want one-on-one help, and you really want guidance in a one-on-one manner all along this next few months that are extremely important, especially if you're holding a boatload of crypto or stable coins, then be sure to check out that very first link down in our description below.
And by the way, if you're on a cell phone or mobile, you can click the little more button and that should open up our list of links. The very first link should take you to a page that looks something like this. But ultimately, it is for our accelerator program where we guide you and help you along your crypto investing journey. So, you have complete and total clarity on whether this is a straightup bull trap or the bull market's likely going to continue. Currently, I believe that dips are for buying, but that could rapidly change if we see the macroeconomic situation worsen, like with oil, the bond markets, interest rates, the equities market, and more.
And I know that's a lot to think about, but heck, that is why we're here. We do a lot of that heavy lifting and thinking for you. So, ultimately, you just know what decisions to make and when to make them to protect yourself, your capital, and your family's financial future. So, be sure to check out those links down in the description below. But that is it for the video, folks.
If you enjoyed it, be sure to subscribe to the channel and I will see you in the next video. Goodbye. [music]
Education and commentary only, not financial advice. Crypto is volatile and you can lose money. Do your own research and speak to a qualified advisor before making investment decisions. Figures and quotes are as reported in the video on October 20, 2026 and may have changed since.
