U.S. Cuts Quarterly Debt Sale, May Do So Again Even With Fed QT
Comment of the Day

May 04 2022

Commentary by Eoin Treacy

U.S. Cuts Quarterly Debt Sale, May Do So Again Even With Fed QT

This article from Bloomberg may be of interest to subscribers. Here is a section:

The Treasury Department said in a statement Wednesday that it will sell $103 billion of long-term securities at auctions next week -- down $7 billion from February. This marks the longest string of quarterly cuts since a 2014-2015 cycle. In a surprise for some dealers, it’s also trimming sales of two-year, three-year and five-year auctions in coming months.

“The issuance plans announced today leave Treasury well positioned” with regard to necessary borrowing, the department said in its statement. However, “additional reductions in future quarters may be necessary depending on future developments in projected borrowing needs.”

Eoin Treacy's view

The Fed hiked by 50-basis points today as expected and suggested 75 basis point hikes are not being actively considered. The pace of quantitative tightening will initially be slower than initially expected.  It will start on June 1st at $47.5 billion and ramp up to $95 billion over the next quarter instead of starting at $95 billion now.

Click HERE to subscribe to Fuller Treacy Money Back to top