🧵Smartkarma #macro #threadoftheday
How the Treasury Refresh May Not Be Catastrophic
— Cam Hui @HumbleStudent
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The U.S. Treasury market is expected to see a flood of new issuance which would draw liquidity from the financial system and create headwinds for the price of risk assets.
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Tthere may be a narrow benign liquidity path for the Treasury account reset if the assets parked at the Fed’s reverse repo facility shift into Treasury paper.
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Separately, a review of technical and sentiment conditions indicates that near term risk and reward are tilted to the downside.
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In Conclusion:
"The U.S. Treasury market is expected see a flood of new issuance which would create headwinds for the price of risk assets. But there may be a narrow benign path for the Treasury account reset." — Cam Hui
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