Really not sure what this implies, mostly that they are erratic. There was a $10 billion add yesterday, but from a low level of 20.25 billion offset by a couple coupon passes. The Treasury has a lot of TIOs in the system as well. Is that significant, hard to say. They may drain the repos going forward, and the TIOs will go away once the Treasury starts the big rounds of financing going forward. Going into October there could be big strain on debt markets and rates.
wallstreetexaminer.com
post 3:
wallstreetexaminer.com
By next Tuesday, their piggy bank should be about empty, just in time for the Katrina and Rita bills to come due. That's right, the Treasury hasn't actually paid much of those bills yet. As of the last daily Treasury statement they have only paid out about $2B of the $60B+ in emergency spending approved by Congress this month. October also brings bills for quarterly interest payments on the outstanding debt (usually about $25B and rising), and being a new fiscal year, all the government agencies are free to start blowing their new budgets so it's 'kid in the candy store time', not to mention bill payment for the end of year 'spend what you got left' spree.
My guess is October borrowing will approach $90B. Most of that being on the short end (4, 13, and 26 week Bills). The reintroduction of the 30 year bond isn't due until next February, so we can't count on that, but they may have to increase the 3, 5, and 10 year note auctions to more than we have become accustom.
The Fed so far has been talking tough about not monetizing it. We will see. |
