By Davide Barbuscia
NEW YORK (Reuters) – A potential slowdown of the Federal Reserve’s balance sheet drawdown and Treasury Secretary Scott Bessent’s assurance against imminent long-term debt hikes could offer relief in the near term to bond market jitters as fiscal concerns linger.
Fed minutes from the January 28-29 rate-setting meeting released this week showed officials weighed a possible pause or slowdown of the Fed’s balance sheet reduction, known as quantitative tightening (QT), as a binding government debt cap could complicate the central bank’s ability to gauge market liquidity. Meanwhile, Bessent said in an interview with Bloomberg Television on Thursday that, for now, expanding long-dated government debt issuance is not on…
