We are at a junction in QE that we start to question the efficiency of the easing mechanism.

The REVERSE REPO operations are averaging ~ $ 900B per day. QE is recirculating back to the FED diminishing it’s effects. This is distorting the treasury market.

We feel the FED will take this into account and start pivoting towards a more HAWKISH stance.

We trade what we see, not what we think, so we are being cautious and will wait for confirmation and price action.