US Treasury issuance suggests more funding market stress and a push for the Standing Repo Facility
The US Treasury is expected to issue another $800 billion in debt this year that primary dealers will need to purchase and either fund or find buyers for. The lack of demand for these securities has already been showing up in inverted US repo markets. It looks likely that more funding market stress is on the way and that the Fed will be under pressure to cut rates again. After that, the natural progression will be speeding up development of the Standing Repo Facility.
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