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Treasury buyback schedule set to be announced ahead of CPI and PPI
The Treasury is expected to unveil the next round of 10 to 30 year buybacks at 11:00 a.m., with investors also watching Thursday’s PPI and Friday’s CPI for signals on the Fed’s next move.
Mortgage News Daily said market activity is expected to stay subdued until major inflation data arrives this week, with Thursday’s producer price index and Friday’s consumer price index potentially shaping expectations for whether the Federal Reserve will hike or hold at its next meeting.
The outlet pointed to an 11:00 a.m. announcement of the next round of Treasury buybacks as today’s key event, noting that the Treasury previously said 10 to 30 year buybacks would total $4 billion per operation and that the figure was described as a minimum.
According to Mortgage News Daily, commentary from the Treasury’s leadership has reinforced that buyback operations could be used as a risk management tool amid recent resilience in the bond market.
After the announcement, the outlet cautioned that buybacks and issuance are linked in practice, arguing that more buybacks imply more issuance elsewhere, leaving the overall balance unchanged on a longer-term basis.