Ahead of both the 10 year auction from the Treasury and the FOMC statement from the Fed, I wonder if the Fed tipped off the Chinese on what they will say in terms of either extending or just fulfilling the existing program of buying US Treasuries. China of course being the biggest foreign holder has become a swing factor in terms of demand and their wishes lately have resulted in some changes at Treasury such as the plan to have 30 year TIPS auctions instead of 20. The main concern of the Chinese is the path of the US$ and thus QE has been influential in that direction. I can only imagine the inflamed look on the face of Chinese officials if they participate today at a decent pace only to see the FOMC one hour later pull a Bank of England and INCREASE the size of their Treasury buying. I find it highly unlikely the Fed extends it and I believe the Chinese are a key reason. I am no conspiracy theorist. I do think Lee Harvey Oswald acted alone.
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