Bonds
Treasuries Rise as Fed Minutes Reveal Discussion of Pausing Balance-Sheet Runoff
- Officials weighed pausing unwind until debt-limit snafu over
- Treasury yields were lower across the curve after release
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US Treasuries rose after the minutes from last month’s Federal Reserve meeting revealed policymakers discussed pausing or slowing the balance-sheet runoff until the government’s debt-ceiling drama is resolved.
US government debt extended its advance on Wednesday, pushing policy-sensitive two-year yields lower by three basis points after the minutes. Officials in January talked about the potential need to consider pausing or slowing their balance-sheet runoff — a process known as quantitative tightening, or QT, which has been ongoing since June 2022 — until lawmakers can strike a deal to avoid exhausting their borrowing authority.