US Treasuries posted modest gains on Monday, finishing near their intraday highs. The market was initially lifted by a decline in oil prices, but gains accelerated following a report that the Treasury Department may utilize its cash account held at the Federal Reserve to conduct bond buybacks.

The report fueled speculation that the buybacks might not be entirely offset by additional debt issuance.

Long-dated bonds led the advance, aligning with the goals of the expanded buyback program announced on August 19; yields on the 10- to 30-year maturities fell 4-5 basis points, while the 2-year yield saw little change on the day.

Just after midday in New York, the 30-year yield dipped below 5.21% to hit its session low, down nearly 5 basis points on the day.

A post on X from Fox Business reporter Charles Gasparino suggested that Treasury Secretary Scott Bessent would fight rising long-end yields "at all costs" ahead of the midterm elections.

The 10- to 30-year SOFR OIS swap rates, which sit below Treasury yields, fell roughly 2 basis points, extending the move triggered by the August 19 announcement.

The spread between the 30-year Treasury yield and the corresponding swap rate narrowed to within 68 basis points, the tightest since February; the gap between the 10-year yield and swap rates exceeded -38 basis points for the first time since January 30.