Yields pull back from multi-year highs after Treasury Department says it will double government debt repurchase size

The Treasury Department said it will double the size of its government debt repurchases, lending support to longer-dated bonds.

"I'm assuming this supply will be replaced by more issuance on the shorter end, particularly bills. This is NOT a debt paydown, it is just a rearrangement of the maturity schedule of Treasuries," said Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, about the Treasury announcement.

This comes as yields around the world have been under pressure in part due to elevated oil prices and fears that inflation could increase.

Japan's 10-year bond yield reached its highest level in three decades. German 30-year bund yields hit their highest point since 2011, while rates on France's 30-year bond reached the highest going back to 2008. 

The U.S. fiscal deficit jumped to $432.3 billion in July, its highest monthly total since March 2021, pushing the year-to-date shortfall to nearly $1.8 trillion. Interest paid to finance the nearly $40 trillion national debt has cost the Federal government about $1.2 trillion this year. 

The latest Federal Open Market Committee meeting minutes are set for release in the afternoon. Investors will likely take a keen eye to the minutes, given the sharp divisions within the central bank. At the July meeting, there were three dissenters voting to hike rates, a division that investors will seek greater detail on.

— CNBC's Sarah Min contributed to this report.