I posted this on twitter - this is bullishQRA Update:The...

I posted this on twitter - this is bullish

QRA Update:

The Treasury increased the coupon auction size to $348b in Q1, compared to $338b in Q4

This is below their own guidance of $396-$460b

They caved in the face of tough 10y-30y auctions this quarter & have chosen to focus on bills

This is a huge shift in policy

The Treasury has essentially told us that whenever the market encounters difficulties (as it did around the 5.5% mark), it will listen

However, the trade-off here is that the effectiveness of higher long-term yields in curbing inflation appears to be diminished.

In the near term, this development appears to bode well for risk assets.

However, in the long run, it means structurally higher inflation

For now, it means RISK ON