The Fed pulled a small amount of liquidity out of the system on Wednesday, at the same time as it announced the results of its first $20 billion Taffy pull. The Fed added $9.75 billion in overnight repos, against $10.25 billion in expirations in its usual open market operations. That brought the 5 day net to an add of $5 billion. The 4 week net change is now a measly add of $250 million, which is extraordinary for the time of year when the Fed is normally pumping Christmas cheer into the market. Last year at this point the SOMA had a 5 day net add of over $15.7 billion and a 4 week net add of $10 billion. This year, the Fed is behind the eight ball, depending on how much of tomorrow’s $43.75 billion in expiring repos it rolls over. Click here to download complete report in pdf format (Professional Edition Subscribers).Try the Professional Edition risk free for thirty days. If, within that time you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.
