The Fed is ramping up “Not QE” .
The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.
This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.
It also did $107 billion in gross new repo loans to Primary Dealers to buy Treasuries, against $94 billion in expirations, increasing total TOMO repos outstanding to $245 billion.
So the Fed has done $415 billion in QE since it started Not QE. The Treasury has issued $517 billion in net new paper since that fateful day.
Powell says it’s Not QE with a straight face. Just another garden-variety, lying, sociopath central banker.
The Fed is buying outright, or lending the Primary Dealers the money to buy 80% of all new Treasury issuance. If that ain’t monetizing the debt, then I’m not in Lisbon.
Apparently, I am.
And If that ain’t QE, then my name ain’t Lee.
It is, therefore I am.
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Lee, I think you have the best explanation for why Not QE started and why it continues. Everyone else seems to think it is because some banks were blowing up, or possibly the CLO market, but I think you have it right that primary dealers are stuffed to the gills with treasuries. I’d like to see your viewpoint more widely disseminated. Keep up the good work.