Subscribers, click here to download the report.
I’m having cataract surgery Tuesday afternoon. Since I’ll be out of commission for a few days, I wanted to give a quick overview of the Treasury supply outlook for the next 3 months.
February is normally a month of big supply because taxpayers expecting big refunds are motivated to file early, resulting in heavy cash demands on the Treasury. That normally means more debt issuance, with resulting pressure on bond and stock prices.
This month is no exception, but the outlook is actually relatively benign as tax revenues have been growing enough to hold supply growth in check.
Furthermore, we also have the Fed greasing the skids with $40 billion a month in outright T-bill purchases, and another $10 billion or so of Treasury purchases to replace approximately that amount of prepayments of Fed MBS holdings in the normal course of business. And that has been enough to take care of business.
This report explains and illustrates the facts that inevitably led to this outlook, and suggests how to view this context in your trading strategy.
This report disdains Wall Street mythology, shows the real data and illustrative charts that clearly define the issues. It suggests your investment strategy for dealing with the facts, as opposed to the Fed or Street narrative.
Want the real-time data that drives Treasury supply and market direction?
Get the full Macro Liquidity series at LiquidityTrader.com — updated as the numbers come in.
Click here for today’s report, the complete archive and upcoming reports every week.