Treasuries Aren’t So Special in Repo Market as Fed Bets Deferred
This article is for subscribers only.
The $1.6 trillion market where dealers go to borrow U.S. government debt is adding to signs that Treasury bears are in retreat less than a month before a potential Federal Reserve interest-rate increase.
Typically, when there is heightened interest in shorting Treasuries -- meaning bet they’ll decline -- the securities are in demand in the repurchase agreement market as traders try to obtain the debt to sell. In the argot of repo traders, that’s known as being “on special.”