As a general rule, I try not to write much about administration policy, as this site is devoted to forecasting the direction of the stock market via the S&P 500. However, treasury rates are very relevant to my modeling efforts. <\/p>\n\n\n\n
This whole plan of buying back long-term treasuries strikes me as gimicky, as they’re then obligated to issue new debt on the short maturity end if not the long end. If the bond market rate increase have been related to sovereign fiscal responsibility concerns, shortening your maturities in an environment where forward rates are higher than today’s rates doesn’t seem likely to be interpreted as fiscally prudent, but rather accelerating when the potential payment on fiscal recklessness comes due. <\/p>\n\n\n\n
I don’t believe the date of a US sovereign debt crisis is remotely imminent, but I’d still feel better if we started changing course, regarding fiscal responsibility. The problem gets worse if we dig the hole faster than the rate of inflation. It’s been a problem of both recent Republican and Democrat administrations.<\/p>\n\n\n\n
As for my model implications, the models don’t differentiate as to whether various treasury spreads are motivated by the government or private sector. It’s not unprecedented for the government to mold the treasury yield curve on more than just the short end, and the model did backtest well, even during the quantitative easing during and following the 2008 crisis.<\/p>\n","protected":false},"excerpt":{"rendered":"
As a general rule, I try not to write much about administration policy, as this site is devoted to forecasting the direction of the stock market via the S&P 500. However, treasury rates are very relevant to my modeling efforts. This whole plan of buying back long-term treasuries strikes me as gimicky, as they’re then… Continue reading Thoughts on Treasury Buyback Treasury Policy<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-993","post","type-post","status-publish","format-standard","hentry","category-blog","entry"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/posts\/993","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/comments?post=993"}],"version-history":[{"count":1,"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/posts\/993\/revisions"}],"predecessor-version":[{"id":994,"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/posts\/993\/revisions\/994"}],"wp:attachment":[{"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/media?parent=993"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/categories?post=993"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bullbearduck.com\/index.php\/wp-json\/wp\/v2\/tags?post=993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}