Bank of America: Potential Agreement Between the U.S. Treasury and the Federal Reserve Won't Shake the Market

CycleProphet · 2026-02-12T15:46:01+00:00

American banking economists have pointed out that investors are questioning the potential coordination agreement between the Federal Reserve and the Treasury Department, believing that the definition of the agreement is unclear and that the market has already priced in its possibility. The agreement mainly involves the Fed's balance sheet reduction and U.S. debt issuance. If the content exceeds current discussions, it could impact the market.

CycleProphet

2026-02-12 15:46:01

Abstract generation in progress

Deep Tide TechFlow News, February 12 — According to Jinshi Data, U.S. bank economists have pointed out that investor speculation about a potential “collaborative 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 that the likelihood has probably already been priced into the market. “Unless the content of the agreement exceeds current market discussions, any new agreement is unlikely to trigger substantial price fluctuations.” Bank of America states that the agreement will mainly focus on the Fed’s balance sheet reduction and U.S. debt issuance. Economists expect that if monetary policy is affected (which they consider highly unlikely) or if the Treasury limits long-term debt issuance (which Bank of America sees as possible), the impact on the market could be greater.

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