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Tag: QT
The Fed's Treasury holdings are essentially unchanged from the prior week. Meanwhile, the Fed allowed approximately $15 billion of mortgage-backed securities to roll off of its balance sheet, the second time in five weeks the Fed has had that level of MBS activity. Good. The Fed blew the housing bubble and needs to unwind it. … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed resumed its overly modest QT program this week. It is better than zero activity. We'll take it. We would like to see the Fed rid its balance sheet of the excesses of 2020-2022 over the next several years at a clip of approximately $1.5 Trillion per year. Treasuries: The Fed’s Treasury security holdings declined … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed may as well end QT. It has only trimmed its balance sheet by $1.03 Trillion since May 2022. This after growing its balance sheet from $4.0 Trillion in October 2019 to a peak of $9.0 Trillion in March 2022. The Fed's balance sheet stands at $8.1 Trillion today. Yet we wonder why inflation … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed modestly trimmed its Treasury holdings while its Agency security holdings were unchanged for the week-ended September 6th. The Fed ought to get out of the Fed Funds rate manipulation game and should instead accelerate its QT program. Treasuries: The Fed’s Treasury security holdings declined by $18.6 billion for the week-ended September 6th and decreased … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
For the second consecutive week, the Fed took the week off as it relates to Treasury activity. This is a policy pause in my view as doing nothing with the money supply is more powerful than playing with the Fed Funds rate. Treasuries: The Fed’s Treasury security holdings were unchanged for the week-ended August 30th and … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
Yields are moving higher, liquidity is leaving the system and asset values should fall. Over time, we believe that investors will focus less on Fed monetary policy and more on fiscal policy. Fiscal policy is the primary catalyst for U.S. economic activity (mostly bad), the Fed simply reacts. This week the Fed allowed $42.6 billion … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed took the week off on the QT front. That has not happened since April 12th 2023. Treasuries: The Fed’s Treasury security holdings were unchanged for the week-ended August 9th and decreased by $56.0 billion on a rolling 4-week basis. Agencies: The Fed’s Government Agency security holdings were unchanged over the same period and decreased by … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed continued to trim its Treasury holdings as part of its QT effort. Our wish is that the Fed would be as aggressive with QT as it was with QE during the 2020-2022 period. The Fed ought to leave its Fed Funds Rate alone and execute its tightening effort exclusively by shrinking the money … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed trimmed its Treasury holdings by approximately $21 billion for the week-ended Wednesday July 19th. I believe QT is a more effective monetary tightening tool than FOMC members arbitrarily adjusting the Fed Funds rate. QT allows the market to adjust rates accordingly as the money supply shrinks. A market-based rate solution is always better … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed's Treasury holdings barely declined in the week-ended Wednesday July 12th and Agency-backed holdings were unchanged for the second consecutive week. For every Dollar the Fed has pulled out of the system through QT, Treasury Secretary Janet Yellen put the same Dollar (and then some), back into the system by winding down the Treasury's … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
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