Treasury Shows How To Use News UPDATE- Professional Edition

Updated – Investors got spooked by the weak GDP numbers, which— surprise, surprise—gave the market a nice goose on the very day that the Primary Dealers had to absorb $55 billion in new Treasury supply. Of course they bought the stuff at higher yields earlier this week and last. Voila, instant profit! Having done its part by pumping up the liquidity base for the past week, the Fed began mopping up operations today. They might do some more next week because the Treasury calendar, while heavy, will actually give the market a break with little or even no new supply. It depends on the size of the 4 week bill auction to be announced Monday. At any rate, it will be a short lived respite.

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This entry was posted on July 31, 2008 at 8:43 pm and is filed under Money and The Fed, Professional Edition. You can follow any responses to this entry through the RSS 2.0 feed.