{"id":7469,"date":"2009-08-05T11:47:04","date_gmt":"2009-08-05T15:47:04","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=7469"},"modified":"2009-08-05T11:47:04","modified_gmt":"2009-08-05T15:47:04","slug":"treasury-to-increase-tips-issuance","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=7469","title":{"rendered":"Treasury to Increase TIPS Issuance"},"content":{"rendered":"

The US Department of the Treasury has announced<\/a>:<\/p>\n

The balance of our financing requirements will be met with weekly bills; monthly 52-week bills; monthly 2-year, 3-year, 5-year, and 7-year notes; the September and October 10-year note and 30-year bond reopenings; and the October 5-year and 10-year TIPS reopenings.
…<\/b>
Currently we believe our existing suite of nominal securities is sufficient to address our borrowing needs; however, market participants should expect auction sizes to continue to rise in a gradual manner over the medium term. In addition, to increase our flexibility, issuance of Treasury inflation-indexed securities will also increase gradually.<\/p>\n

Nevertheless, Treasury will continue to monitor projected financing needs and make adjustments to the auction calendar, if necessary. These include, but are not limited to, the reintroduction or establishment of other benchmark securities or other changes to the auction calendar for existing nominal and inflation-indexed securities.<\/p>\n

Treasury is committed to issuing TIPS in a regular and predictable manner across the yield curve. These securities are an important part of our overall debt management strategy, and market participants can expect issuance to gradually increase in FY 2010.<\/p>\n

Additionally, to potentially improve liquidity in the TIPS program and better capture the premium associated with inflation protection, Treasury will consider replacing 20-year TIPS with 30-year TIPS.<\/p>\n

Any potential changes to the TIPS program will be announced at the November 2009 refunding.<\/p><\/blockquote>\n

Across the Curve<\/i> comments<\/a> that in typical market fashion, this announcement resulted in an increase to TIPS prices:<\/p>\n

TIPS bonds are besting their nominal rivals. In announcing that it would tinker with TIPS issuance the Treasury averred that increased offerings would not occur until 2010.<\/p>\n

The widening of breakevens represents the howls of the shorts who had planned for an increase in issuance at this instant. Thirty year breakevens have moved to 227 basis points from 220 late yesterday.<\/p><\/blockquote>\n

The Wall Street Journal reports<\/a> that increases to TIPS sizes is due to pressure from China:<\/p>\n

China, the largest holder of U.S. government debt, is among investors that have indicated to the Treasury that they want to buy more of the securities, which offer protection against rising inflation, the people said.<\/p>\n

Officials from the U.S. and China discussed TIPS issuance at high-level talks in Washington last week.<\/p><\/blockquote>\n

China is getting assertive! They roiled the market a while ago when they decreased their holdings of Agencies and now they’re demanding inflation protection. Well, he who pays the piper … I have always thought that America’s fiscal profligacy will not reverse until it sinks in on Joe Sixpack’s political thoughts that the rate he pays on his mortgage is set in Beijing.<\/p>\n","protected":false},"excerpt":{"rendered":"

The US Department of the Treasury has announced: The balance of our financing requirements will be met with weekly bills; monthly 52-week bills; monthly 2-year, 3-year, 5-year, and 7-year notes; the September and October 10-year …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-7469","post","type-post","status-publish","format-standard","hentry","category-miscellaneous-news"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/7469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7469"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/7469\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}