persistently high(er) funding repo rates will push the treasury yields up

Illya Gerasymchuk -

2025-07-07 18:20

persistently high(er) funding repo rates will push the treasury yields up

eventually, the bonds would be sold for cash

again - think of the timescale: funding rates refer to much shorter periods

Illya Gerasymchuk 2025-07-07 18:19

repo funding rates don't affect US treasury yields immediately due to time scale

treasury bond yield expectation is over 10 years, and repo rates are a short-term debt funding mechanism

so the rates shock would need to be prolonged/pronounced to affect treasury rates

🧵 🚨FED just injected $11B of liquidity #2

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