U.S. Treasury asks primary dealers: what auction adjustments should be considered?

The U.S. Treasury Department, in its quarterly survey of primary dealers, solicited views on what adjustments to auction sizes should be considered going forward, given "structural changes in investor demand and expectations regarding the medium-term evolution of demand." The survey also asked about the impact of larger long-term Treasury buybacks on liquidity and market functioning, including: How would larger buybacks affect dealers' ability to intermediate funding flows? After such adjustments, has client interest in participating in buybacks, directly or indirectly, changed? What additional adjustments should the Treasury consider to enhance the effectiveness of the buyback program? In addition, dealers were asked whether the Treasury should adjust its practice of selling short-term Treasury bills and floating-rate notes to avoid holding offerings on Federal Open Market Committee meeting days. The 10-year Treasury yield rose 6.3 basis points to recover 5.12%; the 10-year Treasury yield rose 5.4 basis points, and the two-year Treasury yield turned higher.