Dealers Tighten Treasuries Grip as New Fed QE3 Suppresses

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By Cordell Eddings

The world’s biggest bond dealers are growing more reluctant to give up their record holdings of Treasuries, providing support for a rally in the world’s most- liquid debt market that is entering its fourth year.

Goldman Sachs Group Inc., JPMorgan Chase & Co. and the rest of the 21 primary dealers of U.S. government securities have reduced the amount of bonds they offered to the Federal Reserve to average of $8.04 billion a day in the past two weeks, from the $11.6 billion in September 2011, when the central bank began its Operation Twist stimulus program, according to data compiled by Bloomberg. At the same time, Wall Street’s holdings of Treasuries more than doubled since March.

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