Deutsche Bank: The Federal Reserve may implement emergency QE to curb turmoil in the U.S. Treasury market
ChainCatcher news, Deutsche Bank stated that if the turmoil that pushed the cost of long-term borrowing in the U.S. above 5% continues, the Federal Reserve will need to step in to stabilize the U.S. Treasury market.On Wednesday, concerns over the safety of U.S. assets escalated due to Trump's trade war, exacerbating the sell-off of U.S. Treasuries, with the 30-year Treasury yield rising to 5.02%, the highest level since November 2023. If this situation persists, the Federal Reserve will need to intervene, which the bank's global head of foreign exchange strategy, George Saravelos, referred to as a "circuit breaker"—that is, emergency quantitative easing. He wrote, "If the recent turmoil in the U.S. Treasury market continues, we believe the Federal Reserve will have no choice but to urgently purchase U.S. Treasuries to stabilize the bond market."