Central planners gonna central plan.
Boston Fed President Eric Rosengren yesterday proposed a "reverse Operation Twist" in which the Fed would alter its balance sheet composition in order to try and steepen the yield curve.
The catchy moniker refers to the 1961 plan (and the dance craze at the time) to try and lower long term rates, by purchasing long-dated paper alongside sales at the shorter end. The Bernanke-led Fed tried to do the same in late 2011 and 2012. It was eventually scrapped for another bout of QE.
The team at Credit Suisse says while Rosengren's plan is "technically feasible," its implementation seems "highly remote."
Rosengren's "unique focus" on what he considers to be a bubbly commercial real estate market combined with his September dissent suggests his thinking isn't in line with broader FOMC views, says CS.
In other Treasury bond news, JPMorgan's survey this week shows clients shifting to net long from net short, with net longs now the highest since Sept. 26.