Global Feed Post Login
Replying to Nick Berlin

“When the RRF is drained, the Treasury needs to find new capital. It will do this by issuing longer dated Treasuries.

This will cause the banks to use their reserves. “

Basic questions incoming:

Anyone know why the switch from short to long duration? Also, why does that cause the banks to use their reserves? And, finally, use them for what?

Avatar
James Lavish 1y ago

They will need to go further out on the curve to find more pools of capital that can and will be willing to participate in the auctions.

Reply to this note

Please Login to reply.

Discussion

No replies yet.