In normal times, the Federal Government has a revenue windfall in April, and runs a large surplus for the month. Revenues are typically at least 140% of outlays. Even more in good years.
Revenues covered just 24% of outlays in April. We borrowed 76 cents of every dollar the Federal Government spent last month.
We knew this was coming. The questions now are how long it can last, when it will start to recover, and whether it might get worse.
Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve’s System Open Market Account (SOMA) portfolio.
Fed QE $5.000B Coupon Purchase 2020-05-14 NY Fed treasury securities operations
The monetary mouse. After years of Mario Draghi claiming everything under the sun available with the help of QE and the like, Christine Lagarde came in to the job talking a much different approach. Suddenly, chastened, Europe’s central bank needed assistance. So much for “do whatever it takes.”They did it – and it didn’t take.Lagarde’s […]
The Open Market Trading Desk at the New York Fed has released the schedule of large-scale overnight and term repurchase agreement operations for the monthly period from May 14, 2020 through June 11, 2020.
The core problem is the U.S. economy has been fully financialized, and so costs are unaffordable.To understand the long-term consequences of the pandemic on Main Street and local tax revenues, we need to consider first and second order effects. Th…
Last night the S&P futures needed to break 2828 to break the uptrend. Of course it did it by 5 points, and that was it. Boom! Up, up, and away!
The good news is that new cases and new deaths in the US declined week to week. The bad news is that the decline in case numbers was miniscule, and there were big regional differences. The Northeast, which was by far the worst hit region, is showing improvement. The South is getting worse.
Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve’s System Open Market Account (SOMA) portfolio.
Fed QE $1.750B TIPS Purchase 2020-05-13 NY Fed treasury securities operations
