The following statements were posted on MarketWatch today (URL: https://www.marketwatch.com/story/fed-s ... od=the-fed):
Today I heard one analyst explain the market imbalance was due in part to money market funds providing daily liquidity and offsetting their risk with future contracts, requiring greater involvement from hedge fund buyers.The Federal Reserve took two moves to try to calm “unusual disruption” in the U.S. Treasury markets on Thursday.
The Fed said it will lend $1.5 trillion to the short-term funding markets.
In a statement, the Fed also said it would add purchases of Treasury notes and bonds to increase its balance sheet. The central bank had previously been buying only $60 billion of T-bills each month.
So, is there a shortage of buyers and, if so, why isn't the market pushing the rates higher to attract more buyers?