1. You have 2 FOMC meeting dates between the expiration of the 1mo and 3mo. You also have "debt ceiling" now priced into that spread as well. 

2. I'm not too familiar with MBS, but I'm assuming the maturity is much longer than 3mo. You might be getting a 5% coupon on the 3mo but you are only getting it for 3mo vs 4.2%-4.5% of whatever the maturity of the MBS is. 

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Well in some ways you are right to think about how the situation doesn't really make a lot of sense, but it's the market we're in now. You need to read about interest rate forwards and bootstrapping the yield curve, and what implied forward rates mean. Basically the market is saying that the fed is going to hike rates in the short term, but this will eventually end in a recession, and when that happens rates will start to be cut. That is why the bill rates rise a little as they get longer, rates will be higher after the next hike. But then they get lower for the long term, because we will return the the previous interest rate regime of low rates after the inflation is resolved by the recession. This is kind of a simplistic explanation of the complex issue. It's controversial whether and when the fed will start cutting rates and what will happen to inflation.

One thing I would say is if you work in commercial real estate, you should probably be studying up on this right now.


But I have a lot of experience with rates and CLOs, who are you to judge me? It's quite useful for me to observe this. And that's one reason I wanted to try this forum. Honestly I don't know how I managed to make it through all the nonsense in this industry. I think in the end, and despite the competition, most of us wanted be be decent people and not jerks, and those that were decent tended help each other out and make their way upward. Now at this stage no one is like you anymore.

But at the bottom there is just this brutal instinct, like lord of the flies something. I post some remarks that I intended to be helpful, and you glom on to some silly campaign campaign to discredit me, to reduce my self esteem, to make me feel unwelcome, when you don't even know me or what I'm talking about. Fortunately in the real world, it's become easy for me to shut this kind of thing down, and I wouldn't tolerate it as part of my culture because it would keep me from getting the best work out of the people I hire.


Honestly coming from the equity side, CLO thread was an interesting read.  I can see why some would call you a loser based on your tone in that thread but don't think Mr.1st-year-analyst in-M&A's remark over here is warranted.  +1 to toxicity among juniors, something I experienced not too long ago but think family life tends to dilute that toxicity at the senior level.  Don't got much free time to be asshole at that level.


1mo T-bills are trading rich to 3mo because foreign money market funds that prioritize liquidity are unable to access the fed RRP (yielding 4.80) facility and are trying to avoid the US treasury drop dead dates associated with the debt ceiling (which is driving higher 3-6mo bill yields). As the drop-dead range is uncertain, it casts quite a wide shadow on the front end. Given that MMFs generally prioritize liquidity over an outright return as their mandate, avoiding bills that may be disrupted (e.g. late principal repayment) would be prudent. Given that ACMBS cash flows are not directly associated with the US treasury, their cash flows are less likely to be disrupted by congressional shenanigans.


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