Dropping the 20-Year Is Clean Up. The Move to Bills Is the Story
🚨 Nobody wanted the 20-year when they brought it back in 2020 and nobody wants it now. Dropping it is just clean up.
The part that matters is moving to bills. The Fed just hiked and most of them want to do it again. So Treasury is taking the debt and parking it at the short end, which is the one place the Fed controls the price.
Think about what that means. Every hike from here goes straight onto the government's interest bill. Powell could hike and not care. Warsh can't.
And bills have a buyer that can't refuse them. Money funds, bank capital rules, stablecoins. That's not demand, that's a rule. This is what repression looks like before anyone's willing to call it that.
