Goldman Sachs Sees Durable Expression in Lower Dollar

Goldman Sachs has provided an update on the UST buyback program, stating that it believes the more durable expression is a lower dollar rather than structurally lower rates. Bessent, a key figure in the program, described their actions as a 'Treasury twist' in the bond market. The market initially reacted negatively to this communication, with most of the initial rate moves reversing.

Goldman Sachs notes that the Treasury has a 'big toolkit' and is willing to take action, including joint yen interventions, long-end buybacks, and explicit willingness to do more. However, the market remains skeptical about the near-term execution and specific mechanisms proposed to achieve hundreds of billions in savings.