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!!