Run 1 · Markets, Macro & Geopolitics/
Treasury supply can offset disinflation relief
Treasury's $125B August refunding puts a duration test behind the CPI relief.
mixed·Impact 3/5 · high confidence
Analysis by Frank Locascio and TheBRRR Research
What happened
Treasury is refunding about $96.3B of privately held notes/bonds and raising about $28.7B of new cash via $58B 3-year, $42B 10-year and $25B 30-year auctions. The 10-year auction is scheduled for 1:00 p.m. EDT on August 12.
Why it earned coverage
August 5 Treasury quarterly refunding statement and today's 10-year auction.
Investment transmission
Supply absorption and term premium can offset inflation relief.
Affected exposures
TreasuriesTLTmortgageslong-duration equitiesAI capex namescrypto beta.
Next observable receipt
August 12 1:00 p.m. 10-year auction and August 13 30-year auction.
What would invalidate it
Strong 10-year and 30-year auctions with lower tails and stable bid-to-cover.