Tag: Treasuries

$95 Billion Per Month In QT Is A High Bar

$95 Billion Per Month In QT Is A High Bar

The Fed was to have achieved a $95 billion per month Balance Sheet reduction run rate by September ($60 billion of Treasury securities and $35 billion of mortgage-backed securities). The culling of $60 billion in Treasuries per month is going to be difficult to execute. The Treasury market lacks liquidity as evidenced by the sharp … Continue reading $95 Billion Per Month In QT Is A High Bar

Higher Interest Rates & Growth

Higher Interest Rates & Growth

It appears we were correct several weeks ago when we wrote that the Fed will maintain elevated interest rates for longer than markets expect. What are the repercussions for business? A persistently higher interest rate environment will expose hidden zombie companies much like the dry Paluxy River bed in Texas recently exposed dinosaur tracks. However, … Continue reading Higher Interest Rates & Growth

China Is Not Bullish On The U.S. Economy

China Is Not Bullish On The U.S. Economy

Mainland China is not bullish on the U.S. Economy. China's U.S. Treasury holdings have generally declined since 2013 from a peak of approximately $1.32 Trillion (Nov-2013) to $1.07 Trillion as of Jul-2020. Charts and graphs are at the article's end Both the U.S. and China have interventionist fiscal and monetary policy. The difference is that … Continue reading China Is Not Bullish On The U.S. Economy