Welcome To (Treasury) Thunderdome! Overnight Reverse Repo Facility Surges To $104.7 Billion As Investors Seek Shelter From Negative Rates

The Treasury markets are getting blasted like in Mel Gibson’s Mad Max Beyond Thunderdome.

(Bloomberg) — The popularity of one Federal Reserve overnight deposit facility has surged as investors look for shelter from negative rates in short-term markets, which are under unusual pressure over quarter-end thanks to the flood of cash in the system.

Usage of the overnight reverse repurchase facility surged to $104.7 billion on Tuesday, the most since last April, according to data from the New York Fed. It pays an overnight rate of 0% — well above the minus 0.05% available at Tuesday’s close in the general collateral market — helping to temporarily reduce the quantity of reserve balances in the banking system.

The overnight GC govt repo rate is negative.

Look at the yield on near-term Treasury bills.

And Treasury RETURNS are negative to boot.

And the 10Y-3M Treasury curve slope is zooming upwards. Welcome to another edition of Treasury Thunderdome!

Negative Treasury yields and returns abound. Powell and Yellen are the money blasters!!

One thought on “Welcome To (Treasury) Thunderdome! Overnight Reverse Repo Facility Surges To $104.7 Billion As Investors Seek Shelter From Negative Rates

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