Nick Timiraos, often referred to in markets as a closely watched interpreter of Federal Reserve thinking, said the US Treasury has announced a larger limit for buybacks of long-term nominal coupon-bearing Treasury securities. Starting Sept. 9, the cap for a single operation will rise from $2 billion to at least $4 billion. Timiraos, citing interest-rate strategists, said the timing stood out. The move came only about two weeks after the Treasury’s previous quarterly refunding announcement, and it was disclosed just hours before the department had planned to sell $16 billion in 20-year Treasurys. According to the strategists quoted by Timiraos, that unusual timing may indicate Treasury officials were uncomfortable with what was happening in the market.
Nick Timiraos said the US Treasury recently announced that it will raise the cap on a single buyback operation for long-term nominal coupon-bearing Treasury securities from $2 billion to at least $4 billion, effective Sept. 9.
Citing interest-rate strategists, Timiraos said the timing of the decision was notable. It came only about two weeks after the Treasury’s previous quarterly refunding announcement. The disclosure also landed just hours before the department had planned to sell $16 billion of 20-year Treasury bonds.
He said the unusual timing may suggest that Treasury officials did not like what was happening in the market.
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