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The US Treasury: has always faced
pressures
to cut back on long-term securities |
Washington was in no mood to party on October 31, when the
US Treasury halted auctions of its bellwether 30-year bond. An
outpouring of self-congratulatory rejoicing and mirth from the
political pooh-bahs would ordinarily greet such an announcement.
But the spectacle of an industry consultant, Pete Davis, leaking
the news 30 minutes before the end of the press embargo made a hash
of the event. And besides, America was preoccupied with the war
against terrorism.
The decision sent a jolt through Wall Street. "We were absolutely
surprised," says Christopher Fitzmaurice, a trader at Salomon Smith
Barney and co-head of the firm's treasury desk. "The reaction -
five points in one day - was an indication of that. It was the
largest move in a number of years."
Speculation that the Treasury would abandon 30-year bond auctions
had been exacerbating...
