Fed ‘Twist’ Could Push U.S. 10-Year Yield Toward 1.6%, CRT Says
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The Federal Reserve may buy $520 billion of longer-maturity Treasuries while selling shorter-term U.S. debt, pushing the 10-year yield to as low as 1.6 percent, according to CRT Capital Group LLC.
The Fed’s $1.64 trillion of holdings of Treasuries includes $520 billion of debt maturing in 2014 and sooner, which could be sold and reinvested in securities due between 2018 and 2039 in order to raise the duration of the central bank’s government debt portfolio to 7.4 years from 4.9 years, CRT strategists David Ader and Ian Lyngen wrote in a note to clients today.