JPMorgan Slams Treasury's Bond Buyback Plan as Credibility Risk

JPMorgan Chase & Co. strategists have warned that the US Treasury's surprise effort to curb long-term borrowing costs through bond buybacks may lack credibility in the eyes of markets.

The move, announced on Wednesday, involves doubling the size of the Treasury's bond buybacks as a way to provide 'greater liquidity support' and send long-term US yields lower.

However, JPMorgan said that this approach only addresses the symptoms rather than the root cause: the US running a 6% deficit in an economy near full employment.