The Battle for the Treasury Market

Anunreported battle has been brewing deep in the most critical market globally, a struggle for power within America’s sovereign debt market. Now, after recent events, this battle is approaching its most crucial moment. In December last year, Concoda <a href="https://concoda.substack.com/p/the-treasury-market-black-swan" rel="noopener ugc nofollow" target="_blank">reported</a> on the rising hazards in the largest, yet most obscure, market for money. An estimated $2 trillion or more in dollar loans had built up in the shadows, growing to become the most significant part of the repo market, where participants borrow cash overnight (or over another short period) by pledging collateral, usually Treasuries or state-issued mortgage-backed securities. <img alt="" src="https://miro.medium.com/v2/resize:fit:875/0*cO2gKKqR0d4FY9U0.png" style="height:601px; width:700px" /> Source: Concoda The repo market consists of four parts: the cleared and uncleared segments of the “triparty” platform, which connects cash investors with cash borrowers including the Federal Reserve, plus two dealer segments: general collateral financing (GCF) and bilateral (i.e. only two parties involved the trade). <a href="https://medium.com/concoda/the-battle-for-the-treasury-market-ce50c5a5fd5c">Read More</a>