Tag Archive for Shrinkage

Liquidity Tide Continues To Rise As Fed Falls Behind The Inflation Curve

This is an extended free excerpt from the Professional Edition Fed Report. The composite liquidity indicator rose slightly last week, on a mixed performance of its components. The uptrend in the indicator has continued at a steady pace since it broke out in March. Over the course of this latest surge, most of the cash…

Fed Transparent Only If The “Facts” Are Bullish

Liquidity indications have remained neutral over the two weeks since I last updated this report. Panic outflows from Europe boosting theUSsystem seem to have taken a breather, or been covered up, in the wake of the massive ECB liquidity operation just before Christmas. However, other indicators which had been bearish such as bank purchases of…

Fed Feeds Vicious Spiral – Professional Edition

The Fed’s balance sheet shrank dramatically last week as MBS prepayments, GSE maturities, alphabet soup paydowns, and shrinkage of that murky and mysterious “Other” category outraced the beginning of the Fed’s direct purchases of Treasuries. If the current pace of MBS payoffs continues, and it’s likely to as long as competing rates of return are…