note that FED's SFR doesn't lower the treasury yields per se
Illya Gerasymchuk
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