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The U.S. Treasury said Wednesday it expects to begin a regular buyback program in 2024 for cash management and to support Treasury market liquidity.
Buyback operations would not be used to fundamentally change the overall maturity profile of the debt outstanding and would not be used to mitigate episodes of acute market stress, according to slides from Treasury's Office of Debt Management.
"Based on feedback from a broad variety of market participants, including the Treasury Borrowing Advisory Committee and primary dealers, Treasury believes it would be beneficial to conduct regular buyback operations for cash management and liquidity support purposes," Josh Frost, Treasury's assistant secretary for financial markets, said in a statement.
"Treasury anticipates designing a buyback program that will be conducted in a regular and predictable manner, initially sized conservatively, and not intended to meaningfully change the overall maturity profile of marketable debt outstanding."
The Treasury last conducted buyback operations between March 2000 and April 2002. It will provide further updates on its implementation plans in future quarterly refunding announcements, it said in a statement.
Source: Treasury Department's Office of Debt Management
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.