Is the US Treasury Heading for YCC?

Guolian Minsheng Securities believes that the Treasury's release, coming the day after the 30-year Treasury yield hit a new high, is more likely to reinforce market expectations about long-end supply and demand rather than directly alter the outcome of a specific auction. The net effect will be asymmetric—expanding the buyback scale will likely fail to prevent the rise in the term premium's central tendency, while the magnitude of yield declines achievable through buybacks will correspondingly diminish. The costs and effectiveness of this operation may both hinge on the premise that the Federal Reserve tacitly responds by choosing to "hold steady."