After Fed Trims ON RRP Rate by 5 Basis Points on Top of Rate Cut, ON RRPs Plunge to $98 Billion, Lowest since April 2021, -$2.3 Trillion from Peak, on the Way to Zero by Wolf Richter • Dec 21, 2024 • 5 Comments QT has only drained ON RRPs so far, but not Reserves, which are still where they’d been when QT started in July 2022. QT has a long way to go.
What Powell Said at the FOMC about Today’s PCE Price Index: “We Still Have Work to Do Though, Is How We’re Looking at it. We Need policy to Remain Restrictive to Get that Work Done” by Wolf Richter • Dec 20, 2024 • 32 Comments Inflation is still in services, no progress in 6 months. Another bummer: Durable goods deflation, a contributor to cooling inflation, may be over.
Fed Cuts by 25 Basis Points, to 4.25%-4.50%, Sees Only 2 Cuts in 2025, Sees Higher Inflation, Higher “Longer-Run” Rates. QT Continues by Wolf Richter • Dec 18, 2024 • 244 Comments Energetic backpedal from the aggressive monster-rate-cut trajectory envisioned by the markets three months ago.
Fed Balance Sheet QT: -$98 Billion in November, -$2.07 Trillion from Peak, to $6.90 Trillion, Lowest since May 2020 by Wolf Richter • Dec 5, 2024 • 71 Comments Quantitative Tightening has shed 43% of the assets the Fed had added during pandemic QE. Bank-panic facility BTFP is vanishing.
Operating Losses and “Unrealized” Losses of the Federal Reserve in Q3 2024 by Wolf Richter • Nov 23, 2024 • 86 Comments QE was a huge gravy train for taxpayers. But then came the hangover.
Fed’s Balance Sheet Drops Below $7 Trillion. QT: -$53 Billion in Oct., -$1.97 Trillion from Peak, to $6.99 Trillion, Back to May 2020 by Wolf Richter • Nov 7, 2024 • 83 Comments Quantitative Tightening has shed 41% of the assets that the Fed had added during pandemic QE.
Fed Cuts by 25 Basis Points, to 4.75% Top of Range, as Telegraphed to Backpedal from Monster Cut. QT Continues by Wolf Richter • Nov 7, 2024 • 108 Comments “The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance.”
Fed’s ON RRPs Plunge to $155 Billion as QT Drains Liquidity, Nothing Blown Up Yet. SOFR & TGCR Spreads Begin to Move by Wolf Richter • Nov 1, 2024 • 62 Comments “Such temporary rate pressures can be price signals” that help markets redistribute liquidity to where it’s needed most: Fed’s Logan.
Treasury Buybacks: Update on the Bond Market Bloodletting by Wolf Richter • Oct 25, 2024 • 62 Comments Among the jewels: Treasury Dept. paid 88 cents on the dollar to buy back 10-year Treasury notes sold at auction Aug. 2020 at a record-low yield of 0.677%.
The Future of QT, Balance Sheet Composition, and Liquidity: Fed’s Lorie Logan by Wolf Richter • Oct 22, 2024 • 101 Comments QT continues. Liquidity “more than ample.” Money market spreads widening briefly is OK. Selling MBS, shifting Treasuries to T-bills on the table.
