We’ve already covered that fact that the supply of Treasuries will increase in 2018 as a result of the tax cut package and the fact that the Treasury needs to sell new debt to raise the cash to pay off the Fed when it redeems holdings under its program to shrink its balance sheet.
Meanwhile, the demand for Treasuries has been declining. This is a lethal combination for the bond market. We’ve been expecting this for months, and we’ve started to see the impact on the bond market in recent weeks.
One of the most important factors has been the fact that the Primary Dealers continue to be mispositioned. They are suffering losses as a result.
Treasury Pro Trader subscribers (or Professional Edition), click here to download the report.
Subscribe to and read this report in the Treasury Supply and Demand Pro Trader, risk free for 90 days.
Enter your email address in the form to receive email notification when Treasury Supply and Demand reports are posted. Select the reports for which you want to be notified from the list in the form.
[wysija_form id=”4″]
Join the conversation and have a little fun at Capitalstool.com. If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.
You must log in to post a comment.