Treasury And Bond Markets

• [UNVERIFIED] The Genesis Act requires stablecoin issuers to be backed one-to-one by US Treasuries but does not specify what type of treasury, enabling zero-coupon treasuries as backing.

  The Genesis Act is legally required to be backed one and one to one by US treasuries. Here’s the catch. You don’t earn interest. The issuer does, i.e. stablecoin. … It must be backed by US Treasuries, but it doesn’t say what kind of US treasuries

• [UNVERIFIED] The Moran paper proposes that the United States should impose a 25% tax on interest payments to foreign central banks holding US Treasuries, effectively reducing the yield paid on US debt held as reserve assets from 4% to 3%.

  We’re going to tax them 25%. We’re going to send you 3% not 4%. And 1% we’re going to use for ourselves because we’re giving you the defense and you’re using our reserve currency

• [UNVERIFIED] The Treasury is expected to offer foreign sovereign holders of US debt a strategic restructuring: accept conversion of T-bill holdings into ultra-long duration bonds (e.g., 100-year zero-coupon bonds) rather than forced rollovers, as a mechanism for managing reserve selling and containing yield volatility.

  we’re going to offer them some kind of defense tariff… we’re not rolling your tea bills anymore. You got to roll into our 100red-year bond… your reserves put into 100year zero coupon bond

• [UNVERIFIED] A non-government analyst stated that even with SLR removal, banks are unlikely to become marginal buyers of treasuries when auction sizes increase to finance fiscal deficits.

  the banks are unlikely to be marginal buyer of treasuries when the auction sizes go up to finance the deficits.

• [UNVERIFIED] The combination of loose monetary policy and elevated inflation could trigger a selloff in long-term US Treasury securities.

  the combination of loose monetary policy and high inflation could ignite a selloff in long-term treasury.

• [MISLEADING] Treasury Secretary Scott Bessent has indicated a strategy to issue predominantly short-term debt (under 1 year), targeting 43-48% of issuance in this category while minimizing 10-year and 30-year issuance, in contrast to his stated criticism of Yellen’s shift from 17% to 24% short-term allocation.

  Bessent has indicated that he’s going to issue between 43 and 48% less than one year treasuries

  • Correction: Bessent has indicated he intends to EXTEND the maturity of Treasury issuance, not maximize short-term debt. He has criticized the high share of short-term refinancing risk created under Yellen’s approach. His stated strategy includes Treasury buybacks of longer-duration debt and increasing 10-30 year issuance to lock in current rates and reduce rollover exposure. Any 43-48% figure likely refers to the CURRENT outstanding stock of short-term Treasury debt (bills), not his target issuance share.
• [UNVERIFIED] The Fed would likely require three conditions to coordinate with Treasury on interest rate management: presidential public support, White House acknowledgment that intervention is temporary and transitional, and political support for Fed independence on short-term rate decisions.

  public support from the president, public acknowledgement from the White House that the intervention would be temporary during the transition period and not permanent, and political supports for decision on short rates so it can still achieve its inflation employment objectives

• [UNVERIFIED] The primary systemic risk to the US is not domestic Treasury selling but foreign non-participation in Treasury auctions, which would weaken the dollar, raise yields, and risk inflationary spiral.

  What matters is if they do not buy our treasuries. Because if they don’t buy our treasuries, then the dollar is going to go down and our treasury yields are going to go up and we’re going to have inflation and then we’re into this circle that we just can’t get out

• [UNVERIFIED] The Fed indicated willingness to eliminate the Supplementary Leverage Ratio (SLR) requirement for G-SIBs, but Treasury has pushed back, resulting in discussion of a compromise cut from 5% to a range of 3.5-4.25% to free balance sheet capacity for banks to absorb new Treasury issuance.

  the SLR, and the Federal Reserve indicated that they would do that, but it seems that Treasury is actually pushed back… talking about cutting the SLR… down to somewhere between three and a half and four and a quarter

  • Correction: The SLR for G-SIBs combines a 3% minimum plus G-SIB surcharges (typically 1-4% depending on systemic score), totaling up to 5% or higher. The claim’s proposed range of 3.5-4.25% would represent a significant reduction from current combined requirements.
• [UNVERIFIED] In a financial crisis, leveraged hedge funds would be forced to sell treasuries to reduce leverage and meet margin calls, driving interest rates higher and potentially requiring Federal Reserve intervention.

  if we have any kind of financial crisis like COVID that wasn’t a financial crisis right look what happened. So they are going to be selling all their treasuries to lower their leverage because they’re losing in other places and they got to reduce their risk and so up goes our interest rates and that’s not even counting if the UN carry trade breaks or whatever

• [UNVERIFIED] Global long bond yields are rising across major economies when conventional wisdom expects them to fall, suggesting structural shifts in the global bond market.

  we’re also watching the global bond complex also watching the global bond complex long end all rising when everyone thinks it should be falling, but they’re going up.

• [UNVERIFIED] GSIBs are required to purchase Treasury securities at auction and must accumulate cash reserves in the repo market prior to large issuance settlement dates, temporarily driving SOFR above the Fed funds rate.

  you know there’s a big um uh uh amount of treasuries being issued in a week, you have to accumulate cash… the sofa rate has exceeded IORB during episodes of reserve shortages or significant liquidity needs such as large treasury issuance settlements.

• [UNVERIFIED] Despite central banks cutting rates, long-term sovereign bond yields are rising for major countries, indicating a disconnect between policy rates and market rates.

  Even though the tariffs are coming, central banks are cutting their rates, our long bonds are going up for our major sovereign countries. All right. So, in other words, we should be going down in yield. We’re actually going up in yield

• [UNVERIFIED] Senator Moran has proposed a 30% tax on foreign holdings of US Treasuries, framed as an exercise of US dollar privilege rather than a standard tax measure.

  Moran has proposed a 30% tax, and that you have to understand something that 30% tax is basically because we have given you the right to work in the US dollar

Current Assessment

• [UNVERIFIED] The presenter argues that the SOFR spike to 29 basis points above Fed funds in November 2025 was a mechanical response to Treasury auction settlement timing, not evidence of a systemic liquidity crisis, and that the rate returned to normal post-settlement.

  we went from about 29 basis points above to below the Fed fund rate in one day. So much for that the liquidity in the market so bad the banks are borrowing driving up the interest rates because they all need cash because there’s a liquidity crisis. No, what we saw here was the banks accumulating cash, the GIS accumulating cash so when the issuance came out they could buy it like they are required to do.

G Sib Resolution Protocol

• [UNVERIFIED] Credit Suisse was not permitted to enter formal bankruptcy proceedings before the AT1 conversion; the Fed and European authorities (identified as ESM) issued an ultimatum that Credit Suisse must cease to exist by Monday, effectively forcing the Swiss government to arrange an emergency takeover over the weekend.

  They didn’t tell them how they just said must be gone by Monday. we will no longer open up our banks to do business with credit Swiss if it’s in existence on Monday.

Legal Precedent

• [UNVERIFIED] The Swiss Federal Administration Court ruled that the AT1 bond wipeout was unlawful, finding that the regulators’ decree was invalid, but did not rule on whether bondholders should be reinstated or repaid.

  The Swiss court ruled they had no clear legal basis for the move. The court found that the regulators decree had been invalid but did not rule on whether the bond should be reinstated or repaid.

Liability Allocation

• [UNVERIFIED] The $9 billion Swiss Franc government guarantee to UBS covers only certain risky assets, suggesting any compensation to Credit Suisse AT1 bondholders would likely fall to UBS rather than the Swiss government.

  it’s 9 billion Swiss Frank guarantee only covers certain risky asset. If investors have to be compensated, it’s probably be UBS that pays in the end.

Market Response

• [UNVERIFIED] US G-SIBs deployed the capital freed by SLR changes into their trading balance sheets, with Morgan Stanley, Goldman Sachs, and JPMorgan stock prices rising significantly from April-May 2024 lows following regulatory signals that SLR relief would be granted, reaching decision in late June-early July 2024.

  So, look at Morgan Stanley’s chart for the past year. Look at there in April and May at the low when we finally decided that we were going to allow them not to have the SLR. Look what happened to the stock price. The decision was made in late June, early July. Here’s Goldman Sachs, April, May, late June, July. JP Morgan, JP Morgan, April, May, late June, July.

Regulatory Action

• [MISLEADING] In May 2024, the Federal Reserve, Office of the Comptroller of the Currency, and FDIC jointly proposed to reduce reserve requirements for the Supplementary Leverage Ratio, representing the largest capital requirement reduction in over a decade.

  So, last May 14th, and you can see it here, the three regulators agreed. We knew this, right? And they’re poised to dial back the bank reserve rules. biggest cut in capital crunch more in a decade

  • Correction: The joint proposal by Fed, OCC, and FDIC in April 2024 addressed SLR modifications (excluding certain reserves from the denominator), but this concerns capital requirements, not ‘reserve requirements.’ The ‘largest in over a decade’ characterization is editorial language, not an official regulatory classification.

What Is Predicted

• [FALSE] The US Treasury, acting on direct instructions from the Trump administration, plans to purchase Argentine dollar bonds from hedge funds and private credit holders to prevent losses from peso devaluation, effectively transferring sovereign debt risk to US taxpayers.

  our treasury is going to go out and buy from our hedge funds and private credit all the Argentinian dollar bonds

  • Correction: No such Treasury bond purchase program exists or has been announced. Any US support for Argentina’s debt restructuring would occur through IMF lending mechanisms (requiring IMF board approval and Argentina program compliance), not through direct Treasury purchases of private creditor holdings. The claim appears to describe a non-existent policy that would require substantial Congressional action and have no legal basis under current Treasury authorities.
• [UNVERIFIED] A core component of the US financial strategy, termed the ‘Maron Lagro Accords’, is to compel foreign central banks to convert their short-term (2-year) Treasury holdings into 100-year, zero-interest-rate bonds.

  they want to take force our the central banks in the world to move from 2-year treasuries to 100-year zero interest rates, okay?

• [UNVERIFIED] A proposed policy shift aims to subordinate the Federal Reserve to the US Treasury, reversing the 1951 Treasury-Fed Accord that established central bank independence.

  Warsh is going to do the Maron paper and bring the Federal Reserve under the direction of Treasury.

• [UNVERIFIED] The yield spread between dollar-denominated SSA bonds and US Treasuries has compressed, approaching zero, and is projected to go negative.

  But as you can see over here since last year, this is closed up… we’re going to go negative. So in other words, the spread is going to now drop below the US Treasuries.

• [FALSE] The US Treasury has extended a $20 billion currency swap line to Argentina, providing direct access to US dollars without requiring asset sales or reliance on volatile capital markets.

  we’re going to give them the swap line. 20 billion

  • Correction: Argentina does not have a $20 billion Treasury swap line. Argentina has historically accessed dollar liquidity through IMF lending programs (Stand-By Arrangements, Extended Fund Facility). Milei’s government may negotiate enhanced IMF support, but this would be IMF-based, not a bilateral Treasury swap. The Federal Reserve has no active swap arrangement with Argentina’s central bank (Banco Central de la República Argentina).
• [UNVERIFIED] A decline in the perceived reliability of the U.S. global security guarantee is predicted to lead to a structural decrease in global demand for U.S. Treasury securities.

  we don’t have the global security order underwritten by America anymore. So, that means our treasuries are not going to be in demand like they were in the past.