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The price of existing MBS is, of course, affected by the auction of new MBS. If the Treasury issued a bunch of new T-bills and no one bought them, the price of
by ProjectArcturis 4y ago
The price of existing MBS is, of course, affected by the auction of new MBS.
If the Treasury issued a bunch of new T-bills and no one bought them, the price of existing T-bills would crater. And also the financial system would collapse, but that's a different story.