US Treasury asks dealer advice on easing inflation trends, TIPS demand

The U.S. Treasury on Friday asked primary debt market dealers to analyze easing inflation trends on demand for certain securities, including the market's ability to absorb more issuance inflation-protected securities (TIPS) in 2024. In its quarterly primary dealer survey ahead of the next quarterly refunding, the Treasury asked: "How will quantitative tightening, the projected supply of money market substitutes, and other factors affect the demand for short-term Treasuries and Treasury repurchase agreements in the coming year?"

The survey comes as the Federal Reserve is expected to end its balance sheet reduction measures, or quantitative tightening, which has supported bond prices in recent months.