Reuters
A hedge fund study that said the U.S. Treasury last year effectively provided economic stimulus by moderating long-dated bond sales has sparked a debate in the bond market and a denial from the U.S. Treasury that said it was not aiming for such an effect. The U.S. Treasury Department announced in November it would slow the pace of auction size increases of long-dated debt securities, a move that gave relief to bond markets rattled by previous increases in long-term debt supply. This led to a decline in 10-year Treasury yields equivalent to the economic stimulus that would be provided by a one percentage point reduction in the Fed's policy rate, according to a study published by Hudson Bay Capital Management.