De Minimis POMO Ends As Sack Buys $1.6 Billion In TIPS; PDs Found Lacking In Cash As $210 Million Of November TIPS Auction Put Back
Today's viagra-deficient POMO is now over, monetizing just $1.6 billion in TIPS. The Submitted to Accepted ratio is 5.3x, indicating cash shortage at the PDs who are now stuck with useless paper. Most notably, someone wanted to dump $210 million of CUSIP 912828NM8 which was the 9 year 8 month TIPS auction from November 4: so much for inflation "protection." Surprisingly, the MY3 4.5 year CUSIP which is the legendary October TIPS auction which closed at a negative high yield saw no interest in monetization. If we had to guess, investors, contrary to all expectations, are happy with an inflationary bet through the 5 year horizon, then expect deflation after (thus the putback to the FRBNY). How that makes sense is beyond us.