The last two weeks of this coming March look like a set-up for some sort of panic in the US Treasury and mortgage-backed securities markets.
Not the end of the world, but something like being a passenger in an aircraft that suddenly drops several thousand metres.
one-month T-bill rates have fallen by more than 66 per cent.
T-bills are ‘collateral’. They can be readily lent and relent to secure other, unrelated transactions. When people or institutions in the global financial system are not feeling eager to trust each other, they demand more collateral.
The dollar is mocked by the well informed, but aggressively hoarded by the fearful, and those who do business in the shadows.
“Beware the Ides of March” (Julius Caesar, act one scene two)
John Dizard FT 19 February 2021