United States and the IMF

Research at the IMF

The Impact of Higher Oil Prices on the Global Economy Prepared by the IMF Research Department, December 8, 2000

See Also:
World Economic and Financial Surveys Series

World Economic Outlook - October 2000

Financial Implications of the Shrinking Supply of U.S. Treasury Securities    Financial Implications of the Shrinking Supply of U.S. Treasury Securities

Garry J. Schinasi, Charles F. Kramer, and R. Todd Smith
Research Department

March 20, 2001

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  1. Introduction and Summary
  2. Historical Development of Government Securities Markets
    1. The Major Government Securities Markets
    2. The Evolution of the U.S. Treasury Market
    3. The Actual and Projected Decline in the Supply of U.S. Treasury Securities

  3. Key Characteristics and Roles of Government Securities and Government Securities Markets
    1. Key Characteristics
    2. Roles of Government Securities in National and International Markets
         Benchmark interest rates
         Hedging interest rate risk
         Position funding and liquidity management
         Investment and position taking
         Government securities as near-monies and safe havens

  4. Recent Market Developments and Private and Official Reactions to the Shrinking Supply of U.S. Treasuries
    1. Recent Financial Market Impact
         Rising interest-rate spreads
         Reduced liquidity and greater volatility
         Less reliable U.S. treasury yield curve
         Diminished reliability of U.S. treasuries
    2. Private Efforts to Become Benchmark Issuers
    3. Changes in U.S. Federal Reserve Balance Sheet

  5. Private and Public Policy Questions Raised by the Shrinking Supply of Treasury Securities
    1. Are There Private Substitutes for Government Benchmarks?
    2. What Are the Possible Consequences for Day-to-Day Liquidity Management and Longer-Term Portfolio Management?
    3. How Might the Ability to Hedge Interest-Rate Risk be Affected?
    4. Are There Natural Substitutes for U.S. Treasuries as a Universally Accepted Collateral?
    5. How Might Market Dynamics be Altered by the Absence of a Credit-Risk Free Safe Haven?
    6. Is the International Role of the Dollar Likely to be Affected?

  6. Conclusions


  1. Global Bond Markets
  2. Relative Size of Repo Markets
  3. Assets of U.S. Federal Reserve Board
  4. U.S. Federal Reserve Holdings of U.S. Treasury Securities


  1. Public Debt, 1940-2004
  2. Composition of the U.S. Public Debt
  3. Maturity Distribution of Interest-bearing Publicly Held Treasury Debt, 2000-2030
  4. Ownership of U.S. Treasury Securities
  5. Ownership of U.S. Treasury Securities Outside of U.S. Federal, State, and Local Government Accounts
  6. Projected Treasury Debt
  7. Projected Path of Publicly Held Treasury Debt
  8. U.S. Corporate Bonds: Yields and Spreads
  9. Ten-Year Swap and Treasury Rates
  10. Bid-Ask Spreads of U.S. Treasury Bills
  11. Bid-Ask Spreads of U.S. Treasury Notes
  12. Off-the-Run On-the Run Yield Spread of One-Year U.S. Treasury Bills
  13. Volatility of 10-Year Swap Spread
  14. U.S. Treasury Yield Curve