Broadcast straight from the bowels of the US Treasury
Term and Type: 1-Year 10-Month FRN
High Discount Margin: 0.058%
Allotted at High: 50.98%
Total Tendered: $63,408,207,700
Total Accepted: $22,000,067,700
Auction Date: 09/23/2020
Issue Date: 09/25/2020
Maturity Date: 07/31/2022
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This is all new money, but there are $26 billion in T-bill paydowns surrounded that this week that will fund this.
And of course, the Fed keeps adding money to the pot so that Primary Dealers can buy stuff and mark it up. They’ve had a bit of a problem doing that over the past two weeks, haven’t they.
Problems like this beget more problems. The Fed may be forced to step up and do more if this deleveraging nonsense doesn’t stop. I can’t imagine why any dealer, bank, or leveraged speculator would want to strengthen their balance sheet now by liquidating debt, can you?
OK, for those of you who don’t know me, that was sarcasm, folks.
Get the big picture outlook at Liquidity Trader.
Composite liquidity continues to rise, but at a slower pace than in the second quarter as the Fed has slowed QE. That reduces the cash flowing into Primary Dealer accounts, which in turn contributes to a slowing in secondary liquidity drivers.
“Slowing” is a relative word, however. Historically, the numbers remain gargantuan.
No, something else is holding the market back. Here’s what that something is, and what we’re going to do about it.
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