Sell Cash, Buy Bonds?

Who's going to buy all the bonds?! Shrieked the audience. Although there's still no firm consensus on what, exactly, was behind recent volatility at the US long-end (and the accompanying rise in the term premium), a simplified narrative says the market is finally pricing the implications of increased supply (i.e., more issuance) to fund bigger deficits at a time when price-insensitive buyers (including and especially the Fed, but also banks, FX reserve managers and foreign investors) are steppi

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2 thoughts on “Sell Cash, Buy Bonds?

  1. Read that in Sept the Treasury announced they would begin to buy back their treasury bonds when necessary to help market liquidity. This sounds like the beginning of YCC, or didn’t they used to call that QE? Seems like a big deal to me, but I’m not a sophisticated investor….

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