Warsh Fed-Treasury Pact to Have Minimal Market Impact, BofA Says

Federal Reserve chair nominee Kevin Warsh’s call for a new accord with the Treasury Department is unlikely to materially move bond prices as the two institutions already work closely together, according to strategists at Bank of America.

Warsh has floated the idea of revisiting the 1951 Treasury-Fed pact, which dramatically limited the Fed’s footprint in the bond market. The central bank’s balance sheet has swelled to $6.6 trillion after successive asset purchases over the past decade.