Goldman Sachs: The US Treasury can reduce long-term debt by 20 to 40 bps, but it is difficult to change the final direction

Comparing news, Goldman Sachs MarketStrats believes that the US Treasury's expansion of long-term US bond repurchases can indeed ease long-term pressure in stages. Referring to OperationTwist in 1961 and the term extension plan in 2011, policy instruments have historically brought about a 10-20 bps decline in long-term interest rates; Goldman Sachs judged that a phased decline of 20-40 bps in long-term returns is also possible through repurchases, adjustments to the issuance period, and balance sheet management.

But Goldman Sachs is cautious about long-term results. Behind the current rise in long-term interest rates, the driving force is not only a technical mismatch between supply and demand, but also continuing fiscal deficits, inflationary uncertainty, and a rise in the center to balance real interest rates. The report also emphasizes that AI capital expenditure, data center construction, power infrastructure, and re-industrialization are also continuing to drive the capital needs of the whole society. Repurchases by the Ministry of Finance can ease the long-term supply that the market needs to absorb in the short term, but it is difficult to change the general trend of capital becoming more expensive and long-term interest rates rising at the center.