First off, let’s have a peek at how the US Treasury market is acting recently, you know, take its temperature.

There are a few things we look at when determining the health of the Treasury market, one of them being the overall demand of USTs globally. With foreign government buyers fading and major holders like Russia, Japan, and China actively selling USTs for various reasons this year, we know that foreign demand is down.

But it isn’t just foreign country buyers who have faded from bidding, it’s also commercial banks, and since it has begun executing quantitative tightening (QT), the Fed itself has stopped buying USTs and has become a net seller.