Tuesday, April 5, 2011

Why would the Federal Reserve buy 50% of what the Treasury Department sold the week before? Andrew?

"Fed Monetizes 50% Of Primary Dealer Bid From Last Wednesday's 7 Year Auction

In today's POMO the biggest CUSIP monetized was QB9,
of which the Fed purchased $5.99 billion (of a total $8.03 billion).

...the Fed bought back 50% (!) of the Primary Dealer take down ($12.115 billion)
of last Wednesday's (yes that would be the QB9) auction.

This is probably the fastest episode Flip That Bond on record.

Anything else and the Fed would be monetizing bonds that had not yet settled."


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