Goldman, Wells Say Treasury Buybacks Unlikely to Cut Long Rates
Interest-rate strategists at Goldman Sachs Group Inc., Wells Fargo & Co. and other Wall Street firms said the US Treasury Department’s bond buybacks will do little to reverse the jump in long-term yields.
Wall Street strategists from Goldman Sachs, Wells Fargo, Societe Generale, Deutsche Bank, and Scotiabank have all stated that the U.S. Treasury Department's bond buybacks will likely have little effect on reversing the recent increase in long-term yields. The strategists argue that the Treasury's actions alone are unlikely to meaningfully reset rate levels.
They believe that significant changes in the macroeconomic environment, such as a slowdown in growth and inflation, a reduction in uncertainty surrounding the Federal Reserve's balance sheet and rate policy, fiscal consolidation, or a decline in IG issuance, would be required to lower long-end yields. Despite brief drops in yields following the Treasury's announcement, they have since risen again, indicating that the buybacks are not effectively addressing the underlying issues driving long-term rate increases.
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- Goldman, Wells Say Treasury Buybacks Unlikely to Cut Long Rates finance.yahoo.com
