| The US Treasury: has always faced pressures to cut back on long-term securities |
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Washington was in no mood to party on October 31, when the US Treasury halted auctions of its bellwether 30-year bond. An outpouring of self-congratulatory rejoicing and mirth from the political pooh-bahs would ordinarily greet such an announcement. But the spectacle of an industry consultant, Pete Davis, leaking the news 30 minutes before the end of the press embargo made a hash of the event. And besides, America was preoccupied with the war against terrorism.
The decision sent a jolt through Wall Street. "We were absolutely surprised," says Christopher Fitzmaurice, a trader at Salomon Smith Barney and co-head of the firm's treasury desk. "The reaction - five points in one day - was an indication of that. It was the largest move in a number of years."