(Reuters) – The U.S. Treasury said on Wednesday it had not yet made any decision on whether or how to implement a program to buy back some of its existing bonds, a move partly aimed at improving liquidity in the Treasuries market.
The Treasury said it would continue to meet with a variety of market participants to assess the costs and benefits of buybacks, and that it expects to share findings as part of future quarterly refunding announcements.
Liquidity in the world’s largest bond market has deteriorated this year, partly because of rising volatility as the Federal Reserve rapidly raises interest rates to bring down inflation.
The Treasury last month, as part of its regular survey of dealers before each of its quarterly refunding announcements, asked dealers about the specifics of how buybacks could work.
These included questions on how much it would need to buy so-called off-the-run Treasuries, which are older and less liquid issues, to improve liquidity in those securities.
On Wednesday, the Treasury said it was studying potential buybacks and that it would provide ample notice on any decision.
(Compiled by the Global Finance & Markets Breaking News team; Editing by Andrew Heavens)
