$127 billion in net new T-bill supply this week, including a mammoth offering of $60 billion, next Tuesday alone, and another announcement coming on Thursday. And nobody cares.
The Treasury is flooding the market with short paper while liquidity conditions erode. The complacency is staggering.
Something will break.
$25 billion has come out of the Fed’s RRP slush fund in 2 days, which is $10 billion less than yesterday’s bill issuance. Was $10 billion funded by DVP repo? We’ll know after the close. If it was, what would that mean?
See this week’s Liquidity Trader Macro Liquidity update for details on what to expect.