11 hours ago, fxfox said:In case that you missed it, Treasury will be effectively shorting (i.e. selling) UST by $3000Bn for the next 5 months.
Fed will buy $400Bn.
The rest is on whom? pic.twitter.com/mW7I8KAcrl
— Barton (@Barton_options) August 4, 2020
Hmm? What will the FED do? Gotta step in or we gonna crash in September.
That’s BS. Nobody knows what the Fed will do over 5 months. The Fed itself doesn’t know. Nor does the Treasury know how much it will need to borrow that far in advance. The TBAC is pretty good for the current quarter after they’ve had a look at the first 6 weeks, but their estimates for the next quarter are usually way off. Like most econ forecasters they suck at it.
But there’s no mystery what the Fed will do re the Federal Debt. It will do exactly what it has been doing for the past 11 years. It will monetize 90-100% of the debt. So whatever the amount is the Fed will buy or fund all of it. They tried to do otherwise during the brief bloodletting phase from October 2017 to December 2018 and learned their lesson real quick.
https://liquiditytrader.com/index.php/2020/07/28/flies-in-the-bulls-macro-ointment/
Meanwhile, the ES is nearing the 5 day cycle projection of 3330.
