{"title":"Allianz\'s El-Erian: US Treasury buybacks lower long yields; watch for YIELD CONTROL risk, costs and short-lived effects","content":"Allianz chief economist El-Erian said long Treasury yields fell after the US Treasury expanded bond buybacks. He noted the buyback size is small in absolute terms and relative to net issuance, so the key market question is whether this foreshadows wider use of YIELD CONTROL. He warned YIELD CONTROL can suppress long-end yields and lower mortgage and other

{"title":"Allianz\'s El-Erian: US Treasury buybacks lower long yields; watch for YIELD CONTROL risk, costs and short-lived effects","content":"Allianz chief economist El-Erian said long Treasury yields fell after the US Treasury expanded bond buybacks. He noted the buyback size is small in absolute terms and relative to net issuance, so the key market question is whether this foreshadows wider use of YIELD CONTROL. He warned YIELD CONTROL can suppress long-end yields and lower mortgage and other financing costs in the short term but carries side effects and unintended consequences. Such financial-engineering effects are typically short-lived; absent deeper policy changes, any yield compression is unlikely to be sustained."}