Things don’t change that much
September 17, 2025
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–Fed day. Small chance of 50. Likely to be three dissents for 50.
–But rather than go into detail on that, here’s something actually worth watching! A classic clip from Three Days of the Condor with Robert Redford. Joe Turner (Redford) works for the CIA in NY at a front called the American Literary Historical Society. “He reads books and foreign publications to identify potential security threats.” Great movie. The technology changes, but the games don’t.
–A few large trades:
TYV5 115c 2 paid 25k (closing)
TUV 104.375p 5 paid 20k (new)
TYV5 113p 12 for 29k (new, settled 10)
0QH6 9737.5/9775c 1×2 8.5 to 8.75 for 50k. 8.5s, new.
SFRZ5 9631.25/9650c 1×2 2.25 to 2.5 paid 15k. 2.25s, new
–Good 20y auction 4.613%.
–A couple of days ago BBG reported Pimco was scaling out of steepeners, in case of ‘surprises’.
Yesterday BBG story cites Pimco on hypothetical “Operation Mortgage Twist”
In fact, reinvesting mortgages “could deliver as much bang for the buck as a 100 bp cut to the federal funds rate”
–Don’t need to be a CIA operative to know what’s coming next.
