Wednesday, June 15, 2022

Fed Panics — Brian Romanchuk

The Fed revisited some old financial records by hiking by 75 basis points today. This is a signal that they have thrown out whatever remains of the models that suggested that inflation is transitory, and they are hiking until something breaks.
Bond Economics
Fed Panics
Brian Romanchuk


Matt Franko said...

IOR to banks 1.65% of the 3.3T about 55B annual of additional HQLA to banks … will help mitigate the negative effects of the rate increases…

Also get this: “Analysis. JPMorgan Chase's latest twelve months return on assets is 1.1%. JPMorgan Chase's return on assets for fiscal years ending December 2017 to 2021 averaged 1.2%. JPMorgan Chase's operated at median return on assets of 1.3% from fiscal years ending December 2017 to 2021.”

So JPM return on consolidated assets only 1.1% previously now getting 1.65% on Reserves from Fed … it’s ACCRETIVE! 😂

Matt Franko said...

“ The brakes slammed hard in 2008 — but that is because the circular flows in financing stopped dead.”

But what about the rest of the economy?

sths said...

Something breaks. 08 redux because no SLR relief causing "circular flow to stop dead"? What about the supposed QT to the rescue, how much reserve do they have to remove?