(Bloomberg) -- Bond traders who are stuck in a waiting game over Federal Reserve rate policy will soon get some welcome support. Most Read from...
-- Bond traders who are stuck in a waiting game over Federal Reserve rate policy will soon get some welcome support.Starting on Wednesday, and for the first time since the early 2000s, the Treasury Department will launch a series of buybacks targeting seasoned and harder-to-trade debt. Then in June, the US central bank is set to begin tapering the pace of its balance-sheet unwind, known as quantitative tightening , or QT.
The US market will be closed Monday in observance of the Memorial Day holiday. Two days later, the buybacks start. “There has been a lot of volatility in bond yields this year, and there was a sigh of relief since CPI,” said Neil Sutherland, portfolio manager at Schroder Investment Management. The report suggests Treasury yields have seen their peaks for the year, he added, and the easing in volatility has been “most important for the mortgage sector.”“The US Treasury market may rally by year-end as the economy slows from the recent frenetic pace.
“Rates now on Treasuries we see as giving a second bite of the apple for bond buyers,” said James Camp, managing director of fixed income at Eagle Asset Management, an affiliate of Raymond James Investment Management which manages $77 billion. “We are definitely adding duration.
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