The Fed withdrew part of Monday’s massive $10.75 billion add by issuing $8 billion in two day repos, and doing a permanent TIPs purchase for $449 million, against $14.75 billion in expirations. The 5 day net reversed to a drain of $5.26 billion. There are no repos rolling over tomorrow. This week’s Treasury refunding will include a short term $12 billion paydown, but that excess will be absorbed within two weeks with big increases in the size of the bill auctions, particularly the 4 week bills. The Treasury will remain a net borrower until mid December. Click here to download complete report in pdf format (Professional Edition Subscribers).
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