Any Buybacks Seen Increasing U.S. Treasury's Risk Profile
Dow Jones
Aug 25
0549 GMT - Any buybacks will increase the U.S. Treasury's risk profile, no matter how they are financed, Commerzbank's Christoph Rieger says in a note. "The cash balance cannot be drawn down to earlier levels in light of the political risks and increased outlays, while the Treasury will soon be facing an interest bill of above $100 billion each month," the head of rates and credit research says. Longer term, the measures thus need to be accompanied by a coherent credible fiscal consolidation plan to keep the market tame, Rieger says. The U.S. Treasury said last week it plans to double its long-end securities buybacks, while reports emerged Monday that the Treasury was considering using its general account as an option to finance the buybacks.
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