The coupon offering for the end of the month has been posted. Net new supply $145 billion. My forecast estimate was $130 billion. The language used in the quarterly refunding announcement as to whether the Fed’s QT is included or not is inscrutable. I misinterpreted it, hence my miss of $15 billion. But, indeed, heavy supply is heavy supply.
Either way, this is bad news. It doesn’t even count the new T-bills. But that’s ok because, as we know, T-bills are insta-money. That is, if the players want to use it that way. T-bills also make nice places to sit out.
It’s mind blowing supply. Ponzi Much? Understanding Treasury Debt and Market Fragility
