Many of you have been aware this was coming today–and it has been executed.
The New York Fed, who operates the Federal Reserves open market desk, has executed a massive REPO (repurchase) operation this morning.
They have done a $89 billion 1 day and a $45 billion 14 day REPO— $134 billion in total.
As we have mentioned before there is more going on than meets the eye–not that we know what it is, but with the Fed balance sheet up $207 billion in the last couple of months and now larger and larger REPO operations being executed we can only surmise that the huge treasury issuance of notes is larger than the market can bear.
If this continues this will not end well–we only wish we had a crystal ball to tell us when the merry go round was going to stop.