The Fed added $7.75 billion to the liquidity pool Tuesday. It pumped in that amount in overnight repos against no expirations. That sets up a big Wednesday expiration of $17.75 billion with at least $12 billion set to roll on Thursday. At the same time, the Treasury has big settlements set for Thursday. This week it is raising at least $28.7 billion in new cash in the 4, 13, and 26 week bills, and 2 and 5 year note auctions. $21 billion of that will settle Thursday. The Fed will have to step up to keep the market at these levels. Click here to download complete report in pdf format (Professional Edition Subscribers).
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