Operating at the Intersection of Technology and the Capital Markets
Tag: monetary policy
The capital markets are bonkers having been thrown into contortions by perverse fiscal and monetary policy. Up is down and down is up. The Capital Markets remind me of Bizarro World from the Superman comics where everything is backwards. FISCAL POLICY: One could argue that fiscal policy has been working against Americans since the days … Continue reading The Capital Markets Are Bonkers
The Bank Term Funding Program (BTFP, bail out/QE) had approximately $93.6 billion in outstanding loans as of Wednesday this week, up from $91.9 billion (+ $1.7 billion) a week ago. The “other credit extensions” line item of $188.1 billion includes the FDIC loans made to regional banks. This figure is down from $192.6 billion (- $4.5 billion) … Continue reading Weekly Update: Bank Term Funding Program
The Fed's Treasury holdings were unchanged the week-ended May 24th 2023. Minimum QT activity combined with a substantial back door QE program via the BTFP equals QE on a net basis. Treasuries: The Fed’s Treasury security holdings were unchanged for the week-ended May 24th and decreased by $72.3 billion on a rolling 4-week basis. Agencies: The Fed’s … Continue reading The Fed’s Balance Sheet Reduction (QT) Update Premium
Don't worry about the debt ceiling. More spending is coming. The risk of Treasury defaulting in June is 0.00000000000000000001% (I jest), but that is neither here nor there. Both the Dems and the GOP want to spend on pork, it is just a question of which flavor. Therefore, the debt ceiling will be lifted, another … Continue reading Don’t Worry About The Debt Ceiling
The Bank Term Funding Program (BTFP, bail out/QE) had approximately $83.1 billion in outstanding loans as of Wednesday this week, up from $75.8 billion (+ $7.3 billion) a week ago. The “other credit extensions” line item of $212.5 billion includes the FDIC loans made to regional banks. This figure is down from $228.2 billion (- $15.7 billion) … Continue reading Weekly Update: Bank Term Funding Program
The Fed increased its Treasury security holdings by $100 million the week ended May 10th while its Agency security holdings were unchanged. Recall that last week the Fed significantly reduced its Treasury holdings. Treasuries: The Fed’s Treasury security holdings increased by $100 million the week-ended May 10th and were reduced by $57.4 billion on a rolling … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
Tomorrow's CPI release is inconsequential at this point. Prices for finished Goods & Services likely modestly abated and will remain elevated in our view such that 2% CPI is not going to happen this year. More pressing for the Fed is the ongoing banking crisis. The fixed income market ought to be setting interest rates, … Continue reading Tomorrow’s CPI Release Does Not Matter
The Fed will prop up the banking sector with lower rates. Our view is that the Fed will lower its Fed Funds Rate by Labor Day. The only way to make the banking sector solvent is for the Fed to get its Fed Funds Rate down to where the banks can earn a net interest … Continue reading The Fed Will Prop Up The Banking Sector
The Bank Term Funding Program (BTFP, bail out/QE) had approximately $75.8 billion in outstanding loans as of Wednesday this week, down from $81.3 billion (- $5.5 billion) a week ago. The “other credit extensions” line item of $228.2 billion includes the FDIC loans made to regional banks (including FRC, see Fed note below). This figure … Continue reading Weekly Update: Bank Term Funding Program
A Fed pivot to lower rates would end the banking crisis and likely reignite inflation. What will Fed Chair Jay Powell do? The shorts are correct. You shouldn't believe Jamie Dimon and Jay Powell. Jamie lied earlier this week when he talked about "this part of the banking crisis is over." No, as we said … Continue reading How Much Resolve Does Jay Powell Have?
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