Plumbing Feed: Swaps & Interventions

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Welcome to a new type of Conks article: Plumbing Feed. First, it’s not obvious to new readers or those without the Substack app that we’re publishing additional thoughts via the chat (a.k.a Conks Feed). Second, some readers have also requested that the feed, not published on the main site due to post size, be published as articles. Thus, from now on, the Conks Feed will be reshared (not replaced) as a roundup in the following article format — and don’t worry: this format won't replace Plumbing Notes. To read chat posts as soon as they are published, join the feed here.All the best, C.APRIL 22, 2026: LIQUIDITY AT THE (ULTRA) SHORT ENDPeace at the ultra-short-end of the curve, at least until the Fed attempts an unsavory shrinkage of its balance sheet, remains intact. All plumbing gauges, from the SOFR-FF basis to swap spreads, indicate that frictions are minimal and liquidity is flowing, a dynamic that has spread to the rest of the UST (U.S. Treasury) curve (>1y). In geopolitics, it takes two to TACO to maintain stability. in plumbing, it takes two powerful forces of the sovereign, buybacks and RMOs (reserve management operations/purchases), to aid debt market functioning amid large auction tails & outright selling. Cash management buybacks (CMBs), where the Treasury uses (TGA) cash to buy back previously issued bills, have reduced unwanted supply, while RMOs, where the Fed prints reserves to buy bills from primary dealers, reduce the need for dealers to warehouse (i.e., hold) more supply on their books. Buybacks & RMOs have been offsetting the cost of warehousing USTs, espec…