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Now That We’re Through the Month-end QE Shortage

We have a little tightness in the market at the end of every month. That’s because the Treasury issues a big wad of TP and the Fed isn’t there to absorb it. The Fed is just doing its piddly little $20 billion a week of Treasury purchases, and the Treasury is slugging the market with $100 billion or so of new supply.

Last week the actual numbers were worse. The last QE injection was $6 billion on December 23. They then didn’t do another one until Monday January 4, with $8.8 billion. Meanwhile, the Treasury plopped $164 billion in new supply on to the market on December 31.

We got through the deluge relatively unscathed. But there’s a lot to look forward to for the rest of the month.

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Posted in 1 - Liquidity Trader- Money Trends, Fed, Central Bank and Banking Macro Liquidity
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