Fed Looks Poised to Step Up Buying in Belly of Treasuries Curve
- Treasury issuance changes have increased 7- to 20-year bucket
- JPMorgan predicts $3.1 billion rebalance to the sector
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The Treasury market’s weight has shifted around in the past year, meaning the Federal Reserve’s $80 billion monthly purchases no longer fit the way they’re supposed to.
A reevaluation of how much the central bank is buying of each maturity is in order, likely in the coming months, Lorie Logan, the New York Fed official who manages the purchases, said on Thursday. She told dealers in a speech that the Fed will “make minor technical adjustments to our purchase sectors and increase the frequency at which we update purchase allocations to remain roughly proportional” to supply.