The Treasury steps into the bond market, but the Fed minutes lean hawkish

Good morning. Yesterday the US Treasury stepped in to fight the bond sell-off directly. It announced it will more than double the size of its bond buybacks, from up to 2 billion dollars per operation to at least 4 billion. With long-term yields at multidecade highs, the government has become a buyer, and the 10-year yield dipped right after the announcement.

Experts see it as a patch rather than a cure. The underlying cause of high yields is the debt itself, and US national debt passed 40 trillion dollars for the first time yesterday. The minutes of the Fed's July meeting, released the same day, were no comfort either. A majority said rates would need to rise if inflation does not cool, and more officials wanted a hike than the three who formally dissented.

Even so, stocks bounced after three straight losses. The Dow and S&P 500 gained about 0.2% as yields eased, and a Moderna trial result lifted health care. Chip stocks, the hottest group this year, remain about 18% below their June peak, which is why people are talking about a bear market.

Today brings Walmart and Lowe's earnings. Target raised its full-year outlook yesterday, giving some hope that the consumer is holding up better than feared, and Walmart will show whether that read carries over.