In theory, Federal debt-management policy potentially plays an important role in determining Treasury and private security yields. However, empirical studies have been unable to detect any significant effects from Federal debt-management. In large part the insignificance of relative asset supply effects associated with Federal debt-management policy may result from the use of unrestricted reduced-form models of interest rate determination. Using a disaggregated structural model of the markets for corporate bonds, equities, and four distinct maturity classes of Treasury securities, Federal debt-management policy is found to affect Treasury and private security yields significantly. Furthermore, the yields on corporate bonds and equities are influenced disproportionately.

V. Vance Roley, Carl E. Walsh, Monetary Policy Regimes, Expected Inflation, and the Response of Interest Rates to Money Announcements, The Quarterly Journal of Economics, Vol. 100, Supplement (1985), pp. 1011-1039

This paper examines the response of the term structure of interest rates to weekly money announcements. Estimated responses for both the pre- and post-October 1979 periods are first presented. Then, two competing hypotheses involving the policy anticipations and expected inflation effects are formally specified and compared with the estimated responses. Both hypotheses are found to be consistent with the responses, but they have sharply different implications about the Federal Reserve's short-run monetary policy. By exploiting these different implications, additional empirical results focusing directly on the money stock process support the policy anticipations hypothesis.