Markets Are Quiet. Too Quiet.
Many Happy Returns
The Fed's Reverse Repo Yield Is Dominating US Treasuries
The Treasury's balance in its general account, like its current account, dropped from $700 billion at the end of last year to under $50 billion now. Morgan Stanley think that it's going to have to issue something like $730 billion over the next three months and a total of one and a quarter trillion dollars over the rest of the year. And that's pretty worrying because the question is always who's going to buy it. You've got a lot more supply, not necessarily more demand if people are kind of complacent about risk.
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