The Two year treasury auction ‘best described as gruesome” displayed a dramatic rise in interest rates in order to sell the $60 Billion offered by the Treasury.

https://www.zerohedge.com/markets/gruesome-2-year-auction-markets-start-freak-out-about-tigher-fed

Is this not the most dramatic signal that the ability of the Fed to keep interest rates at the current low levels continues to weaken. Note that the GOP opposition to raising the debt limit may well force a government shutdown in October 1st. Note also that once the debt limit is raised, the size of new Treasury auctions will grow dramatically which will further weaken the Fed’s ability to avoid a dramatic rise in interest rate necessary to keep the government funded.

While all this news reinforces my short position in the June 2022 Eurodollar, I strongly recommend more broadly to all to sell all of your bond/fixed income positions across the board

Big Bob the Bond Bear