how does SRF lower UST bond yields?

if you have a US bond and you need cash, your options are:

1️⃣ borrow cash against bond in repo markets
2️⃣ sell the bond

this $500B liquidity pool for US bonds prevents their sell-off in the open market, which would raise their yields

Illya Gerasymchuk 2025-07-07 17:56

with SRF the FED sets an upper limit on repo market rates

most of the collateral is US Treasury bonds

this exerts downward pressure on bond yields - by preventing sell-offs