Year Discussion Redux

April 30th, 2008 11:49 am | by John Jansen |

A former colleague who is a paid up subscriber to the blog questions my assertion that the year bill auction will be $15 billion.  He makes the very valid point that at just $15 billion the central banks would hoover in the entire issue and the new instrument would be a repo fail from settlement day.

He suggests that the appropriate size to make the issue tradeable is $23billion to $25 billion.

I am about to visit the local deli for some sustenance but I will revisit the issue when I return.  I did scour some Treasury websites but found nothing there about intended size of new issue.

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  1. 2 Responses to “Year Discussion Redux”

  2. By matt on Apr 30, 2008 | Reply

    Is there any particular reason why this source says 23-25 billion is appropriate? Based on the most recent TICS and FRB custodials, I’d guess 25 billion would be swallowed just as easily as 15 billion.

  3. By John Jansen on May 1, 2008 | Reply

    I did not ask him his logic. I will attempt to find an economist who has plugged a number into a Treasury financing forecast. With all the FOMC stuff yesterday, I couldnt find anyone who wanted to discuss the lowly year bill.

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