Forward Guidance How U.S. Treasury Is Fighting The Fed | Nouriel Roubini & Stephen Miran on Treasury’s $800 Billion of “Stealth QE” via “Activist Treasury Issuance” (ATI)
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Jul 23, 2024 
Economist Nouriel Roubini & financial analyst Stephen Miran discuss 'Activist Treasury Issuance', its impact on asset values, avoiding a recession, and potential divergence from the Fed's policy. They delve into the history of Treasury's policies and the implications of unconventional fiscal policy.
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Stealth QE via Treasury Issuance
- The U.S. Treasury is issuing more short-term bills and fewer long-term bonds, a form of "stealth quantitative easing (QE)".
- This reduces long-term Treasury yields, stimulating growth and potentially hindering the Fed's inflation-fighting efforts.
Activist Treasury Issuance (ATI)
- Treasury's deviation from established debt management rules is unprecedented in scale and duration.
- This "activist" approach has impacted financial markets and the economy.
Mechanics of ATI
- Treasury's issuance of short-term debt (bills) is like swapping one form of money for another, with little impact.
- However, issuing long-term debt (coupons) manipulates the market's interest rate risk exposure.