Out of the Box #23: Why the Treasury undershoots actual issuance needs
To begin, let’s briefly revisit what we released before the QRA announcement a couple of weeks ago (see here).
We mentioned that:
1. We anticipated the funding plan would predominantly favor the shorter end, along with the repo-drain.
Chart 1: ON Repo facility based on QRA
The Treasury’s funding release has validated that view and markets reacted promptly to lower-than-expected coupon issuance.
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