JPMorgan strategists said in a report that the U.S. Treasury’s buyback operation on Thursday may signal a modest decline in bid quality compared with recent operations. The bank said the Treasury accepted a broader range of bonds and ended up buying less than the maximum amount it had set for the operation. Although the operation was larger, the total amount of bids submitted remained at the lower end of recent levels, while the ratio of bids to the purchase cap fell to its lowest point since this segment of the buyback program began. In the end, the Treasury bought $5.2 billion of long-dated bonds, below its initial maximum target of $6 billion. JPMorgan also said the U.S. is still running a 6% budget deficit even as the economy is close to full employment, adding that the issue will not be resolved without substantial fiscal consolidation, according to Jin10.
JPMorgan strategists said in a report that the U.S. Treasury’s buyback operation on Thursday may indicate slightly weaker bid quality than in recent operations.
The report said the Treasury accepted a broader range of bonds and did not reach the preset cap for the transaction. Even though the operation was larger, the total value of submitted bids stayed near the low end of recent levels. The ratio of bids to the cap also fell to the lowest level since this part of the buyback program was launched.
The Treasury ultimately purchased $5.2 billion of long-dated bonds, below its original maximum purchase target of $6 billion.
JPMorgan also said the U.S. is maintaining a 6% budget deficit while the economy is close to full employment, adding that 「without substantial fiscal consolidation, this problem cannot be resolved」, according to Jin10.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
