But First, A Number
Before I get into the withholding tax data for May, the Treasury just posted the following on the heels of the signing of the debt ceiling deal. My reaction? HOLEE COWWWWW!!! Non-subscribers, click here for access.
Subscribers, click here to download the report.
| Date | Security Type | Total Offering | Total Publicly Held Maturing |
Net New Cash or (Pay Down) |
| 06/08/2023 | Bills | $123,000 | $101,998 | $21,002 |
| 06/06/2023 | Bills | $164,000 | $135,979 | $28,021 |
| 06/05/2023 | Bills | $65,000 | $25,000 | $40,000 |
| 06/02/2023 | Bills | $25,000 | $0 | $25,000 |
That’s $95 billion in new supply in 6 days. And that’s only the beginning, whoa whoa whoa whoa whoa whoa oh oh oh oh oh oh oh uh oh. Non-subscribers, click here for access.
You would think that that would leave a mark in T-bill trading, but so far at least, nothing has moved. It might be because the market was already at 5.42, which is 37 bp above the Fed’s RRP rate. Once again, the market leads, the Fed lags. The T-bills should start sucking money out of the Fed’s RRP slush fund. Non-subscribers, click here for access.
It’s all dead money anyway until investors decide that they want to use it for something else. If it stays in the RRPs, yes it’s available to spend on stocks and bonds, but there’s a reason that $2.2 trillion or thereabouts has just sat there for the past year. And if it gets pulled out to go back into the Treasury’s cash account for rebuilding to the desired $600 billion, that cash won’t be spent in the markets, or the economy either. Non-subscribers, click here for access.
That money is dead to me. It won’t be used to support stock and bond prices. As Treasury issuance explodes and the Fed continues to insanely pull $95 billion per month out of the banking system, something will break. That’s a given. Non-subscribers, click here for access.
Subscribers, click here to download the report.
KNOW WHAT’S HAPPENING NOW, before the Street does, read Lee Adler’s Liquidity Trader risk free for 90 days! Act on real-time reality!
