Repo Relief and the Basis Trade

The Treasury basis trade remains materially larger than 2024, and this week's easier repo conditions point to a modest unwind rather than a forced break in Treasury plumbing. The Office of Financial Research says Treasury futures basis positions have grown materially relative to the 2024 baseline, while the New York Fed's Desk operations reflect the post quarter-end easing in funding conditions that mattered for repo-funded relative-value books. financialresearch.gov newyorkfed.org

- The OFR's stability work says Treasury futures basis positions have grown materially relative to the 2024 baseline. financialresearch.gov - The New York Fed's Desk operations reflect the easing in funding conditions after quarter-end that let balance-sheet pressure recede. newyorkfed.org

Behind the paywall: the balance-sheet transmission, the core objection to the unwind thesis, and the filing to watch next week.