Call it what you will, the Fed has started the new QE. It’s coming fast and furious with POMO on top of TOMO that will grow the Fed’s balance sheet as fast as it did under old QE. It’s a sign that the house is on fire.
In the Fed’s daily overnight repo operations for October 4 it offered $75 billion in overnight repurchase agreements to Primary Dealers. The dealers took $38.55 billion at an interest rate of 1.8%, to fund the carry of their securities holdings. Here’s what this means.
Lindsay Williams asked me about today’s market break, and about Donald Trump. As usual, I did not hold back. Follow the money. Find the profits!Liquidity is money. Regardless of where in the world that money originates, eventually it flows to and through Wall Street. So if you want to know the direction of the next…
In today’s POMO, the Fed bought $1.6 billion in coupons, to offset shrinkage of its MBS portfolio in the normal process of mortgage prepayments.
Lest we forget, the Fed is still doing regular small POMO to replace MBS paydowns. But as we saw this week. It’s not enough.
The phrase. “It’s the economy, Stupid,” became famous in first Clinton campaign. And Wall Street has always wanted you to believe that indeed, it is the economy, Stupid.
But the game has changed radically in the past two weeks
Is the stock market at Irving Fisher’s famous “permanently high plateau?” Is that plateau a launchpad for even higher prices? Or is it perhaps a cliff?
I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that.
In accordance with the FOMC Directive issued September 18, 2019, the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York will conduct an overnight repurchase agreement (repo) operation from 8:15 AM ET to 8:30 AM ET tomorrow, Fri…
The new Fed TOMO (Temporary Open Market Operations) are the first sign that the Fed must move aggressively to counter the tightening of the money markets.