Treasury Bill Positions Reach Two-Year High Before Oct. 30

U.S. primary dealers’ net long positions in Treasury bills reached a two-year high amid large bill auctions, drawing attention to dealer holdings as repo markets face potential cash pressures. The Secured Overnight Financing Rate (SOFR) was at or below 3.90% during the week ended Oct. 23, matching or staying below the Federal Reserve’s interest rate on reserve balances. Repo is short-term financing backed by securities. Dealers can connect cash investors with leveraged Treasury investors seeking financing, and that intermediation uses dealer balance-sheet capacity. Dealer position figures track securities exposure, while SOFR tracks an overnight financing rate. Net bill issuance is projected to remain positive through November before turning negative in December.

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