But Don’t Taper..

The Treasury Dept just announced a 1 month Bill auction for Tuesday, size unchanged at 35 Billion. The September cash management bills have all matured at a size of 115 B.  The paydown of weekly Bills has hit 38B and the week will net another 20B. As we stated on Squawk on the Street last Thursday, the Fed needed to pull back on LSAP because of the supply side. For September, roughly 153B in short dated collateral has evaporated and things are just heating up.

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