primary dealers

Yield Curve Inversion Was/Is Absolutely All About Collateral

If there was a compelling collateral case for bending the Treasury yield curve toward inversion beginning last October, what follows is the update for the twist itself. As collateral scarcity became shortage then a pretty substantial run, that was the very moment yield curve flattening became inverted.Just like October, you can actually see it all unfold.According to the latest FRBNY [...]

Last Year Wasn’t The Year of Inflation, It Consistently Set Up This Year For Inflationary Fail

By Jeffrey P. Snider|2022-03-01T18:43:27-05:00March 1st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The most common explanation for UST repo fails is that short sellers become an imbalance in the market for Treasuries. Convinced (isn’t everyone?) interest rates have nowhere to go but up and these instruments are doomed, therefore ripe to profit from the destruction, short selling sharks supposedly swoop in. Since they’ve borrowed UST’s they don’t own, the herd is susceptible [...]

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