U.S. Treasury Buybacks Could Complicate Fed's Task

1012 GMT - The U.S. Treasury's announcement that it would increase buybacks of long-dated debt could temporarily help keep long-dated yields lower, but it could also complicate the task of the Federal Reserve of containing inflation, says Rabobank's Elwin de Groot in a note. "Easier financial conditions from lower long yields sit awkwardly alongside above-target inflation, complicating the Fed's task, as minutes show several policymakers were prepared to raise rates in July," he says. Investors could conclude that the Treasury will adjust issuance or buybacks whenever long yields rise too quickly, creating an implicit 'Treasury put', he says. The DXY dollar index falls 0.3% to 98.636, hovering just above Thursday's three-month low of 98.557.