We can’t forget this QT is still happening in the background too… in view of S&Ps recovering back to a old 2 year high this week…
Fed steadily keeps working this balance down and it at least takes some reserve asset pressure off “money center” banks that have ample/excess reserves…
This “unprinting money!” is supposed to be bearish according to monetarists… yet equity index values are currently back to all time highs after a 2 year hiatus…
Concomitant the daily RRP sub-account is being reduced… daily RRP account balance is down to $600B having been $2.3T a year ago …. but still any non zero RRP balance means reserve assets are flowing towards banks that don’t have the regulatory capital to posses them and accordingly have to figure out how to divert them or otherwise apply reduced values to other assets they posses… but at least this daily RRP amount has been significantly reduced over the past year…
Fed has no stated plans to modify the current QT policy…
The Fed's balance sheet is now at its lowest level since March 2021, down $1.3 trillion from its peak in April 2022.
— Charlie Bilello (@charliebilello) January 19, 2024
How much more QT is needed to unwind the massive QE from March 2020- April 2022?
$3.5 trillion. pic.twitter.com/9KVuF6efM1
5 comments:
"This “unprinting money!” is supposed to be bearish according to monetarists… yet equity index values are currently back to all time highs…"
This is such an important point and it totally refutes what the monetarists have been saying/predicting for so long, yet NO ONE is talking about this.
Right… same reification error they continue to teach and always have… thinking “money is real!”…
Instead contributing to the recovery via the regulatory ease… f ‘em all…
What isn't part of the narrative doesn't get talked about.
Just let all these Art degree dumb Fs all stay short…
Their failures don't get talked about.
Monetarists losing money? Shush...
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