Dear Trader,
Andrew's got the mic today and he's bringing Frank along with him, which is good timing, because…
Washington owes almost $40 trillion and has to keep selling paper to cover it.
Buyers on the long end got scarce enough that Treasury just doubled its buyback ceiling to coax them back.
Oil climbing for a fourth straight day doesn't make that math any friendlier.
Bring questions.
This link adds State of the Market to your calendar.
The Daily News Breakdown
SIREN: Treasury said Wednesday it's at least doubling its long-end buybacks, lifting the ceiling on 10-to-20-year and 20-to-30-year operations from $2 billion to at least $4 billion each. This came a day after the 30-year printed above 5.33%, a level nobody's seen since 2007, which apparently got somebody's attention. Yields fell about nine basis points to 5.196%, the 10-year shed six to 4.647%, and stock futures ripped higher over what amounts to two extra billion dollars against a $40 trillion debt pile. Nobody's issuing less paper here. The bigger operations don't even start until September 9. The fact that the long bond moved at all on this should tell you how few people have been showing up to buy it since June.
SNEAKER: The national debt sat near $39.9 trillion in mid-August and should cross $40 trillion this week, months earlier than anyone penciled in. Bank of America's Michael Hartnett built a framework around it called Anything But Bonds, and the logic is boring and hard to argue with. Washington borrowed $1.8 trillion in the first 10 months of fiscal 2026, including $432 billion in July alone, and somebody has to buy all that paper. Interest on the debt runs about $1.4 trillion a year now. The 10-year hit 4.6% and the 30-year hit 5.2%. Hartnett sees $50 trillion by 2029 and says the trade doesn't end until five-year yields drop under 3.25%. He'd rather own gold, stocks, biotech, real estate – anything that isn't a long bond.
SIGN: Oil climbed for a fourth straight session early Wednesday, with Brent up 26 cents to $91.28 and WTI up 37 cents to $85.31. Both settled Tuesday at their highest since July 24. A ceasefire expired Monday, Trump says there are no talks with Iran and insists the Strait of Hormuz is open, and Tehran says the opposite. Watch what the shippers do instead of what the politicians say. Iraq's cabinet just approved a mechanism to route crude exports around Hormuz, with three-month contracts starting September 1. Two Chinese shipping giants have stopped sending tankers through Hormuz and Bab al-Mandeb and are picking up cargoes outside the Gulf. That's real money rearranging supply chains on the assumption nobody fixes this quickly.