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Not Even The Fed...

The global market for fixed income is over $90 trillion USD. By my reckoning, yearly traded volume is well in excess of $300 quadrillion USD.

An Operation Twist program that buys up $40 billion or so of long-term US Treasury bonds (TLT, IEF) every month isn't that big a deal in market of this size. If the Fed does this for ten months as announced, this would represent about 0.4% of the total global bond market. And it would represent 0.00002% of global bond trading volume during that period.

You might be wondering: Why do I use the global bond market size as the benchmark as opposed to the US Treasury market size? Simple: Global arbitrage.

rk (long VUSTX)
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