JPMorgan: US Treasury Buyback Data May Indicate Slightly Lower Bid Quality

Odaily reports: JPMorgan strategists said in a report that the US Treasury accepted a broader range of bonds in Thursday's buyback operation, and the final transaction size fell short of the set ceiling, which may indicate that the quality of bids has declined compared to recent operations. Despite the larger operation size, the total amount of bids submitted remained at a recent low, and the ratio of bids to the ceiling also fell to the lowest level since the launch of the buyback program for this sector.

The Treasury ultimately purchased $5.2 billion in long-term bonds, below its original maximum purchase target of $6 billion. In addition, the US is maintaining a 6% budget deficit while the economy is near full employment, and "this problem cannot be resolved without substantive fiscal consolidation." (Jinshi)