Bank of America: A "potential agreement" between the US Treasury and the Federal Reserve is unlikely to shake the market

According to Odaily, economists at Bank of America have pointed out that investors' speculation about a possible "coordination agreement" between the Federal Reserve and the U.S. Treasury is raising questions. The bank believes that such an agreement is "not clearly defined" and its likelihood has probably already been priced in by the market. "Unless the content of the agreement goes beyond the current scope of market discussions, any new agreement is unlikely to trigger substantial price fluctuations." Bank of America stated that the agreement would mainly focus on the Fed's balance sheet reduction and U.S. Treasury issuance. Economists expect that if monetary policy is affected (which the bank considers highly unlikely) or if the Treasury restricts long-term bond issuance (which Bank of America sees as possible), the impact on the market would be greater. (Golden Ten Data)