Operating at the Intersection of Technology and the Capital Markets
Tag: QT
The Fed will likely hike by 25 BPS today (although we hope for 50 BPS). On the subject of a Fed pivot, market commentators seemingly always neglect to mention the QT component. QT is a more powerful monetary policy tool than is the Fed Funds rate in our view. Banks can't lend a Dollar that … Continue reading A Full Fed Pivot
The sooner the Fed gets to where it is going, the sooner it may pause and observe. In addition, Treasury yields remain negative across the yield curve which is not long-term healthy for the economy. The Effective Fed Funds rate range stands at 4.25-4.50%. If the Fed believes that the upper bound should sit at … Continue reading Why The Fed Should Hike By 50 BPS
The Fed's tightening game is more than a one-trick pony. Quantitative Tightening ("QT"), is equally if not more important to monetary policy than the Fed Funds Rate. The Money Supply & QT. The Fed reduces the size of its balance sheet by selling holdings or allowing holdings to mature. Both methods result in money being … Continue reading The Money Supply & QT
The Fed's Treasury position was essentially unchanged for the week-ended January 25th while the Fed's Government agency/Mortgage-backed securities position was $15.2 billion lower over the last week. The housing market remains inflated in our view due the Fed's ZIRP policy in 2020 and 2021. Many suburban housing markets that saw residential properties trade at $200/SQFT … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed significantly trimmed its Treasury holdings during the week-ended January 18th while its Agency security holdings are essentially unchanged over the same period. The Fed has treated the U.S. housing market with kid gloves over the past month, certainly so since January 1st as its Agency security position is only $1.5 billion lower month-to-date. … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed's balance sheet was essentially unchanged over the week-ended January 11th. Treasuries: The Fed’s Treasury security holdings were $1.2 billion lower over the last week and $58.2 billion lower on a rolling 4-week total basis. Agencies: The Fed’s Government Agency security holdings were unchanged over the last week and $17.2 billion lower on a … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Fed reduced its Treasury holdings by $43.2 billion in the week-ended January 4th. The Fed's Agency security holdings were unchanged. The Fed continues to shrink the money supply. Therefore, one should expect Treasury yields to move higher along the yield curve so long as the Fed continues to shrink the supply of money. The … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
Total Treasury and Agency security holdings were reduced by $12.5 billion for the week-ended December 28th 2022, were reduced by $34.3 billion over the last 4 weeks and were reduced by $357.9 billion for the year. Fed Balance Sheet – Treasuries: The Fed’s Treasury security holdings were $635 million lower over the last week, $16.9 billion … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
Total Treasury and Agency security holdings were reduced by $18.6 billion for the week-ended December 21st 2022. Fed Balance Sheet – Treasuries: The Fed’s Treasury security holdings were $13.2 billion lower over the last week and $35.9 billion lower on a rolling 4-week total basis. Fed Balance Sheet – Agencies: The Fed’s Government Agency security holdings were … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
There was essentially no movement on the Fed’s Balance Sheet this week with only very minor changes. Total Treasury and Agency security holdings were reduced by $1.3 billion for the week-ended December 14th 2022. Fed Balance Sheet – Treasuries: The Fed’s Treasury security holdings were $1.2 billion lower over the last week and $22.7 billion lower … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
You must be logged in to post a comment.