Hedge fund study on U.S. Treasury issuance fuels debate
NEW YORK - A hedge fund study that said the U.S. Treasury last year effectively provided economic stimulus by moderating long-dated bond sales has sparked a debate in the bond market and a denial from the U.S. Treasury that said it was not aiming for such an effect.
The study echoes suggestions by Republican senators last month that the Treasury deliberately increased issuance of short-term Treasury bills to give the economy a"sugar high" ahead of the elections. Roubini's paper drew a similar parallel.The Roubini paper “suggests a strategy that is intended to ease financial conditions, and I can assure you one hundred percent that there is no such strategy.
"At best, this ... kept rates marginally lower than they would have otherwise been," said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities USA."This is highly consistent with Treasury's goal to obtain the best possible funding for the taxpayer and is not in any way a sinister plot to 'ease' monetary policy," he added.
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