WASHINGTON (Reuters) – The U.S. Treasury on Friday said it is asking primary bond dealers whether it should increase the size of auctions for Treasury Inflation-Protected Securities (TIPS) following the Federal Reserve’s announcement of a new inflation targeting policy.
The dealer questionnaire, released on Friday, starts the process for the Treasury’s next quarterly debt refunding announcement. It also asked dealers to comment on the drivers of increased bank demand for U.S. Treasury securities.
“To what extent has this demand been influenced by increased bank deposits, the level of bank reserves, temporary relief from the Supplementary Leverage Ratio (SLR) provided by bank regulators, or other factors?” the questionnaire asked.
(Reporting by David Lawder; Editing by Chris Reese)