Treasury Demand Surge
The recent standing repo facility has sparked unprecedented foreign participation in U.S. Treasury auctions, with central banks eager to underwrite deficits. Smaller regional banks, holding substantial excess reserves, are poised to leverage this liquidity to invest in treasuries and mortgages, shifting the attractiveness of collateral away from cash. This evolving landscape hints at a significant uptick in demand for Treasury securities, driven by key institutional players.In this clip
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Zoltan Pozsar on What’s Going on in Rates Markets Right Now
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