Dealers cheer Fed's US$216b Treasuries rollover

New York

IF YOU were under the impression that the Federal Reserve was done buying Treasuries, think again.

While the central bank won't be expanding its balance sheet, about US$216 billion of Treasuries in its portfolio mature in 2016, up from negligible amounts the past few years. Last week, New York Fed president William Dudley reiterated policy makers' plan to keep reinvesting the proceeds for the time being, giving bondholders and Wall Street dealers reason to cheer.

The Fed is the biggest holder of the government's debt. Its US$2.5 trillion hoard, amassed in a bid to …