Illya Gerasymchuk
Entrepreneur / Engineer
note that FED's SFR doesn't lower the treasury yields per se
it's more correct to say that it puts downward pressure on them, in the form of a $500B buffer
& note that treasuries probably wouldn't be the first in line for liquidation
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