MNI BRIEF: US Treasury Seeks Dealer Comments On Fed QT

The U.S. Treasury on Friday asked its primary bond dealers for their outlook on issuance sizes across the yield curve and expectations for the Federal Reserve's balance sheet reduction process ahead of its next quarterly announcement of financing plans.

Dealers were asked for their expectations for QT with regard to timing, pace, total amounts, and composition, and when Fed redemptions will end. The Treasury also asked dealers about their expectations for the long-run size and composition of the Fed's balance sheet and the future level of reserves. "Is Treasury’s current coupon issuance schedule well positioned to finance additional privately-held net marketable borrowing needs resulting from the SOMA redemptions you expect," the department asked.

The dealer questionnaire, released on Friday, starts the process for the Treasury’s next quarterly debt refunding announcement that is scheduled to be released May 4. The Fed's next FOMC meeting is May 3-4 and top Fed officials have said recently balance sheet plans could be decided as soon as May and start as soon as June.