Treasury paydowns, Fed MBS settlements, massive tax receipts, and massive foreign central bank buying are combining to boost market liquidity. The only question is where it will be deployed. Today it was bonds.
The Federal Government’s withholding tax collections last week grew by +5.2% year over year. The Monthly Treasury Statement for March also confirmed the strong gains that the daily statements had shown in real time. Here’s what that means for the economic data ahead.
While the Fed’s balance sheet flattens, bank lending and money supply measures continue to skyrocket.
Macroliquidity indicators have been in a pause, but that could end this week as the Fed settles a pile of MBS purchases over the next week and announces a record amount for the next month. But the seeds of destruction may lie therein. This report explains why, and what to expect from the markets over…
The markets now have the benefit of Treasury paydowns boosting dealer and investor cash levels till the end of May. Recent indications suggest that the cash windfall may be even bigger than initially forecast. Here’s what that could mean for the markets.
Both the 10 year yield and the dollar are consolidating. The question is where they go from here.
The Federal Government’s withholding tax collections continue to grow strongly. March growth was at a slower pace than earlier in the first quarter, when the numbers were on fire. But they were still solidly positive. Meanwhile numerous conomic pundits are calling first quarter GDP growth to be near zero. Who’s right–conomists and their models, or…
Net new Treasury supply will be extremely light for the balance of the second quarter and the ECB and BoJ are pumping cash like mad into the accounts of bond trading firms. What are they going to do with it?
The 10 year Treasury yield appears headed for a test of the lows and the dollar has pulled back, but not enough to break the uptrend.