Luke Gromen: UST market could face dysfunction before tighter conditions affect corporates

Luke Gromen: UST market could face dysfunction before tighter conditions affect corporates
UST market faces risk of dysfunction

Luke Gromen, founder, president, macroeconomic analyst, investor at FFTT, LLC (Forest for the Trees), warns that the U.S. Treasury (UST) market is likely to experience dysfunction before tighter financial conditions begin to impact corporate and consumer sectors.

He questions whether Warsh would allow the UST market to deteriorate, potentially even to the point of failed auctions, or instead inject USD liquidity to ensure market functioning as Powell and Yellen have done in the past.

Gromen has previously questioned why deflation in China is not offsetting U.S. inflation, raising the possibility that de-dollarization may be a factor in current dynamics here. He has also discussed how few are combining consideration of high U.S. real rates with fiscal dominance in economic analysis here. These recent comments add context to his latest warning about possible dysfunction in the U.S. Treasury market.

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