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Fed Will Restart QE to Stabilize Treasury Market, Pozsar Says

  • Marginal buyers won’t support $24 trillion Treasury market
  • QE will aim to ‘police swap spreads,’ not inflate risk assets

The Federal Reserve will be the backstop of the Treasury market this year to alleviate dysfunction resulting from its increasing size and the retreat of regular buyers.  

That’s the view of Credit Suisse Group AG analyst Zoltan Pozsar, who in a note to clients Friday predicted the Fed will restart asset purchases during the summer of 2023.