Rates Guy

trade ideas and commentary US STIRs

[Rates Guy @GuyRates]

@DeItaone So, tga is built by bonds and they'll use tga to buy bonds, why not issue less (liquidity etc)

[Rates Guy @GuyRates]

@josephwang Won't reducing the bonds auction have the same impact? At the end of the day he can't really unleash 1 trillion on market with 1.8 trillion deficit, low TGA balance actually demands higher yields

[Rates Guy @GuyRates]

@josephwang U6 is down as well, usually reduction in labour force has less impact here, as marginally attached ones are still counted

[Rates Guy @GuyRates]

@ScottSkyrm Duration, settlement, certainity and counterparty would be different

[Rates Guy @GuyRates]

@stevehou Probably someone who voted for no change this meeting and no change for the rest of the year

[Rates Guy @GuyRates]

And increase velocity of reserves, would partially QE like impact and
Second, can actually shift fed's holding towards longer end doing a operation twist kind of thing, while cutting rates keeping short end anchored and stabilizing the long achieving a pseudo YCC

[Rates Guy @GuyRates]

Have been thinking of potential outcome of Trump getting his fed governors, a lot of chatter about ycc etc. I think natural outcome won't look like outright ycc, with fed(board) under Trump's control, Government can easily have regulation ease on banks (stress test, ratios etc)

[Rates Guy @GuyRates]

@DeItaone For people asking grok, they are issuing bonds that can convert into equity, essentially if price of their share trades at 35% higher price than now

[Rates Guy @GuyRates]

@RepoInsight Us based would probably select SOL to deploy, ETH is Tokenization story but US based stable coin would benefit solana more as it's a US org

[Rates Guy @GuyRates]

@rithik_dujari @josephwang Are you talking about transmission here, if all the reserves don't find a hom, it would push short end out side the range from below and which can lead to fed acting which may reduce bs.

[Rates Guy @GuyRates]

@HayekAndKeynes You need money for self actualization (maslow's hierarchy)

[Rates Guy @GuyRates]

@ScottSkyrm By paying rate on reserves fed is not draining liquidity from market, irrespective of the rate reserves will be same, unless fed reduces it's balance sheet or government increases it cash balances

[Rates Guy @GuyRates]

@josephwang @EricSRosengren Did he say something like this when he was at fed?

[Rates Guy @GuyRates]

@EddBolingbroke Technically they are betting for spreads to go less negative which would be spread getting less wide

[Rates Guy @GuyRates]

@EggCapitalWS @NickTimiraos Not exactly firing a lot of them are on payroll till sep, a lot of them were offered a buyout

[Rates Guy @GuyRates]

@josephwang Not very independent of them to cut 50bps near election into very high growth numbers and very high house prices not major strain in the economy

[Rates Guy @GuyRates]

@politicalawake Ah the reference to winnie the pooh as well 🤣🤣

[Rates Guy @GuyRates]

@ScottSkyrm Plumbing is relevant as well, in stress scenario intermediation goes down drastically and banks/dealer try to hoard cash, leading to overdraft charges to some player in morning, and repo rates actually moves up, if they don't selling id orderly and non stress

[Rates Guy @GuyRates]

@ScottSkyrm Seems normal, in a stress scenario sofr should fix further above ff, A flight to quality normally happens in extreme risk off scenarios, during which liquidity dries and funds unwind their rv trades which temporarily pushes yield up (everything down market) and repo should jump

[Rates Guy @GuyRates]

@magic_carpetcap @HayekAndKeynes "Surplus"