[Citrini: The "U.S. Treasury-Fed Agreement" may create conditions for the rise of 30-year U.S. bonds] On August 28, Citrini Research said that as the U.S. Treasury and the Federal Reserve strengthen collaboration, it may push the government to turn more to short-term debt financing and reduce the supply of long-term U.S. Treasury bonds, thereby creating conditions for the rise of 30-year U.S. bonds. The research firm believes that changes in U.S. bank regulation, Treasury debt management and the Federal Reserve's balance sheet policy are converging in a framework that can be called a new "Treasury-Federal Reserve Agreement." According to this framework, the Federal Reserve will reduce its balance sheet, while commercial banks will expand their own balance sheets. As governments reduce their issuance of long-term bonds and instead issue more Treasury bills, banks will absorb more short-term Treasuries. Citrini said a reduction in the supply of long-dated Treasuries could help push long-term yields lower. The agency recommends that clients bet on the 30-year U.S. Treasury bond outperforming the 5-year Treasury bond, that is, the yield difference between the two narrows.