Lee AdlerMacro liquidity measures have absolutely gone through the roof, blown the lid off, set off a tsunami, as US government spending skyrockets to the moon…
It worked well in theory and in practice for a dozen years. But at what is likely to be the most important juncture in our…
$321 Billion That’s how much cash the Fed will pump into Primary Dealer accounts this week. Guess how much new Treasury issuance there will be…
The Fed injected around $600 billion into the markets and the banking system last week. That’s about $2,000 for every American, and it was just…
On March 3, the Fed converted Not QE into Panic QE. Since then it has pumped $766 billion in cash into Primary Dealer accounts. At the same time the US Treasury issued “only” $147 billion in new debt. So in essence, the Fed issued $619 billion in excess cash.
Other than the hyperinflationary implications, what good has it done? What does it mean for us looking ahead.
With no prior announcement or clue, the Fed bought $37 billion in Treasury coupons from Primary Dealers on Friday. To pay for them it deposited $37 billion into dealer accounts at the Fed.
It was the largest single day POMO (Permanent Open Market Operation) purchase since the days of TARP and QE 1 in 2009.
It came without warning. I was so glued to the intraday live charts on Friday, I wasn’t even aware that the Fed had taken this emergency action until after the close.
We sure as hell saw the result. But this is only the beginning of this story.
With no prior announcement or clue, the Fed bought $37 billion in Treasury coupons from Primary Dealers on Friday. To pay for them it deposited $37 billion into dealer accounts at the Fed.
It was the largest single day POMO (Permanent Open Market Operation) purchase since the days of TARP and QE 1 in 2009.
It came without warning. I was so glued to the intraday live charts on Friday, I wasn’t even aware that the Fed had taken this emergency action until after the close.
We sure as hell saw the result. But this is only the beginning of this story.
Investors and leveraged speculators instead took the coronavirus panic straight to the bond market. Dealers, bless their little hearts, were long up the wazoo. Talk…
The market got way ahead of the amount of cash that the Fed was pumping into dealer accounts in February. That took a toll, and…
We knew that Not QE would fall well shy of Treasury issuance in February, and that that would be a problem for the markets. Subscribers,…
The pause in the growth of the Fed’s balance sheet over the past 6 weeks isn’t what the pundits are telling you. Some are saying…
It ain’t rocket science. The Fed drives liquidity and stock prices are the first order effect because that’s how monetary policy transmission is designed. These…