With all eyes on the expansion of Quantitative tightening (QT) in September, the Federal Reserve's reverse repo facility is an essential piece to understanding how the Fed can potentially enact a smooth balance sheet reduction schedule.... Read More
Over the past six months the Fed has raised rates 275 basis points, the fastest pace since 1981.... Read More
The Federal Reserve has embarked on a historic tightening cycle to rein in inflation. The combination of rate hikes and quantitative tightening will continue to restrict financial conditions. The effect of rate increases is relatively known, while the effect of large-scale reductions of the balance sheet remains relatively unknown.... Read More
Even as the Fed ramps up the Treasury portion of their monthly QT runoff to $60B per month, they will not have to actively sell any notes or bonds until after 2024.... Read More
The Fed operated profitably as rates remained subdued. With rates now rising, the math quickly begins to work against them.... Read More
How big are the Fed's holdings of bonds, notes, bills, TIPS, MBS, agencies, and FRNs in relation the outstanding market?... Read More
Updating the changes in central banks' balance sheets... Read More
Yesterday Chairman Powell signaled "forward guidance" is effectively over and the Fed will now react to data. This sets the stage for another 75 basis point hike in July, with even more hikes after that.... Read More
Updating the changes in central banks' balance sheets... Read More
Questions about the Fed's resolve remain. This is at the heart of the debate in the market today.... Read More
Updating the growth in central bank balance sheets... Read More
Will the Fed have to actively sell notes and bonds to reduce the Treasury portion of their balance sheet by $60 billion per month? Some rough math suggests they have time on their side.... Read More
Updating the growth in central bank balance sheets... Read More
Updating the growth in central bank balance sheets... Read More
Updating the growth in central bank balance sheets... Read More
Desperate politicians will do desperate things, like attempting to enforce price controls. So, to head this off the Fed will step in with aggressive tightening. And by doing this, they will risk doing what they too often do, hiking rates too much and breaking something.... Read More
Updating the growth in central bank balance sheets... Read More
Updating the growth in central bank balance sheets... Read More
How big are the Fed's holdings of bonds, notes, bills, TIPS, MBS, agencies, and FRNs in relation the outstanding market?... Read More
The Fed doubled the counterparty limit of its repo facility to $160 billion per day at its most recent FOMC meeting. The volume flowing through this facility continues to grow.... Read More