US Treasury is World Largest De Facto Shadow Bank

The US Treasury has become a key driver of stocks and other asset markets through its pro-cyclical issuance of debt and the increasing depth and liquidity of repo markets, BBG's White writes in tdy's MacroScope column. Writes net treasury issuance leads global equity prices by about 6-9mths due to repo markets. The rise in the volume of collateralized lending, i.e. repo, facilitated by the increase in the supply of USTs is increasingly influential for the behavior of asset prices.