The Fed held. Treasury bought. What did the repo market see?

Last week was an interesting one for US rates.

Treasury completed a $6 billion buyback of 20- to 30-year securities, accepting the full amount from $10.75 billion submitted.

A day later, the Federal Reserve held its target range at 3.75%–4.00%. Perhaps more interestingly, two FOMC members dissented in favor of a 25bp increase. These are very different policy actions, addressing very different parts of the market. But they share something important: both ultimately interact with the enormous market for financing US Treasuries.

That’s where repo comes in.

Treasury buybacks can change the availability and composition of collateral. Fed policy determines the cost of money and influences the supply of reserves. Dealers, banks and cash providers then have to finance and reposition around those changes.

The overnight repo market is where many of those forces meet. And while SOFR provides an important benchmark for what happened in overnight Treasury financing, it is published the following morning.

TraditionData’s Predictive Overnight Repo (TPOR) provides an intraday view, using activity across the tri-party, FICC GCF and bilateral DVP repo markets to estimate the next SOFR fixing throughout the trading day.

That makes weeks like last week particularly interesting. The question isn’t simply whether the market correctly predicted the Fed. It’s whether changes in liquidity, collateral and funding conditions can be identified as they happen, before they appear in the following morning’s benchmark.

After a Treasury buyback and an FOMC decision in the space of 24 hours, there is plenty to look back on.

About TraditionData

TraditionData is a leading provider of OTC financial market data, delivering high-quality, independent insights, sourced directly from one of the world’s largest inter-dealer brokers, Tradition.

With over 1 trillion data points spanning 200,000+ instruments across FX & money markets, interest rate derivatives, credit & fixed income, equities, and energy & commodities, TraditionData provides unparalleled insight into global OTC markets. Backed by Tradition’s global broker network, the data reflects real trading interest from market participants, offering transparency in traditionally opaque markets.

Whether you’re managing risk, valuing products, or making trading decisions, our data ensures you have the clarity and confidence to act.

For more information, please contact: Stephen Body, Global Head of Marketing at TraditionData.

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Tradition predictive overnight repo

A valuable insight during the trading day as to where SOFR will fix tomorrow.

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