The Fed pulled $1 billion out of the liquidity pool on Friday. It added $6.5 billion in weekend repos against expirations of $7.5 billion. This week’s Treasury cash call of $14 billion followed last week’s first installment of $18 billion of an estimated $160 billion in net borrowing through early April. The quarterly refunding raised around $3 billion in new cash to settle next week, with the 13 week and 26 week bills to raise a net of only $1 billion. That means the 4 week bill auction should be a whopper. We’ve seen the announcement of a big 4 week bill auction unsettle the market in the past. Click here to download complete report in pdf format (Professional Edition Subscribers).
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