$7.8 Billion POMO Ends, Fed To Pass $1 Trillion In Treasury Holdings On December 21

The countdown to $1 trillion is on: with today's $7.8 billion POMO just completed, at a very low 2.3x submitted to accepted ratio, meaning PDs had been perfectly positioned to ramp risk higher, total Fed holdings has now risen to just over $966 billion. And with just over $37 billion in scheduled POMOs through the end of December 21, the Fed will hold just over $1 trillion in US Treasurys on the day of the winter solstice. We are confident that pagan Fed frontrunners everywhere will be celebrating with $1,000 bottles of Cristal. As for today's POMO, while we did see a monetization of the just auctioned off 7 Year PK0 Cusip, it was a token $60 million, as even courtesy of the Fed's generous commissions and wide spreads, the PDs still will be hard pressed to make free taxpayer bonus money on a bond that priced at 2.253% three short weeks ago, and is now at 2.68%.



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