Thank you Meyrick. I could be wildly off base here but if HFs are short TNH24 or other treasuries by a massive amount for example, and expect the rates to rise, and the trade goes south (blows up) for them, and it is a highly leveraged trade, does this mean that their future ability to fund/buy treasuries is limited? This might imply that future auctions would be underfunded "D or F" for example? Exactly what the FED doesn't want?
Thank you Meyrick. I could be wildly off base here but if HFs are short TNH24 or other treasuries by a massive amount for example, and expect the rates to rise, and the trade goes south (blows up) for them, and it is a highly leveraged trade, does this mean that their future ability to fund/buy treasuries is limited? This might imply that future auctions would be underfunded "D or F" for example? Exactly what the FED doesn't want?
what could possibly go wrong?