Treasury buyback expansion reported, official's title disputed
PANews describes a plan to grow the program, but names the official as Deputy Treasury Secretary Brooke, not Treasury Secretary
Published
PANews reported that a Treasury official named Brooke has laid out plans to expand and improve the government's debt buyback program. The outlet identified the official as Deputy Treasury Secretary Brooke, not the Treasury Secretary.
The program has grown in stages this year. On September 9, Treasury raised the maximum size of its long-end liquidity support buybacks from $2bn to at least $4bn per operation, an increase that runs through November 4, according to a Treasury press release. That followed an August 19 move, when Treasury doubled the size of its longer-dated buybacks, a change Bloomberg reported was later tripled to as much as $6bn per operation by September 9. Treasury has said it will give more detail on future buyback sizes at its next Quarterly Refunding on November 4.
The August 19 expansion targeted 10- to 20-year and 20- to 30-year debt, a segment CNBC reported had seen a buyers' strike since late June. Markets responded that day: the 10-year yield closed down 5.7 basis points at 4.647% and the 30-year fell 9 basis points to 5.196%, CNBC reported, with stock futures rising. Bloomberg reported that the September 9 tripling failed to move the $32 trillion Treasury market, coming amid a surge in oil prices.
An expanded buyback program fits Treasury's established pattern of debt management, but it does not change the broader picture facing bond investors. The 10-year yield stands at 5% and longer-dated yields are near multi-year highs, and against that backdrop buybacks remain a marginal tool next to the structural forces pushing rates up, including uncertainty over foreign demand at recent auctions. Positioning on this news is neutral.