Maybe an explanation here? According to Michael Ashton, on June 15, 2022, $38B of an old 3-year note will be maturing, while the Treasury is issuing $44B of "a new 3-year note that settles on June 15th," and it's likely the Fed will again bid on some of it?
"The Fed won’t bid for zero—they own $132bln of securities maturing in June, and they are only trimming $30bln per month from the portfolio, so their bid will likely just be a few billion less in each auction."
So perhaps the Fed's still an active buyer – maybe also on those issues of new 3- and 6-month T-bills – but is just bidding on a smaller proportion of each offering than it did previously?
Beyond that possibility, I have no idea whatsoever?
Nor am I at all clear on what happens when series like that older 3-year note mature, and the Fed still holds some of those at maturity? Do they get a cash payment or some sort of accounting IOU from the Treasury, or? If so, over time should we also expect to see fewer securities but also a larger 'cash or accounts receivable' balance on the Fed's balance sheet?
I'm sure it's some "technical" issue as you describe - they'll always have an excuse. It just seems absurd to me that they are buying anything at this point, since the main thing QE does is boost wealth inequality. They're at almost $9 trillion. Just stop buying, and maybe let the maturing stuff roll off. They can't even seem to do that.
"The Federal Open Market Committee informally agreed to lower its $8.9 trillion in holdings by a maximum of $60 billion in Treasuries and $35 billion in MBS each month. The securities won’t be sold but instead will be allowed to “roll-off” — holdings will decline as principal payments come in and less is reinvested."
And maybe if they're feeling bold and frisky ... ;)
"However, FOMC members said they could consider outright sales of agency MBS once the balance sheet runoff gets underway."
Absolutely, but the optics to me is horrible for them. They're STILL monetizing? Come on. And NOBODY asks them about this. My thesis is that the Fed is full of shit.
The Fed reporters all think the Fed is God. They just want to be invited back to the pressers and write their obsequious books praising the Fed they report on.
Strikes at the heart of real debate among our presstitute class, is the one true God at the Fed or CIA or Gates Foundation or WEF? So many luminary experts awash in praise and adoration with so many think tank endorsements to choose from.
It's what they do regardless. The challenge is they are stuck. Do what America needs? Or, do what the world needs?
That's the unfortunate undertaking when you sign up to be the world's reserve currency.
Until now, for roughly 64 years, they could easily do what America needs and seasonally adjust all the numbers or massage them into a pretty picture for the global financial system. That game has run it's course.
Maybe an explanation here? According to Michael Ashton, on June 15, 2022, $38B of an old 3-year note will be maturing, while the Treasury is issuing $44B of "a new 3-year note that settles on June 15th," and it's likely the Fed will again bid on some of it?
https://www.investing.com/analysis/weekly-inflation-outlook-the-fed-paint-begins-to-dry-200625352
"The Fed won’t bid for zero—they own $132bln of securities maturing in June, and they are only trimming $30bln per month from the portfolio, so their bid will likely just be a few billion less in each auction."
So perhaps the Fed's still an active buyer – maybe also on those issues of new 3- and 6-month T-bills – but is just bidding on a smaller proportion of each offering than it did previously?
Beyond that possibility, I have no idea whatsoever?
Nor am I at all clear on what happens when series like that older 3-year note mature, and the Fed still holds some of those at maturity? Do they get a cash payment or some sort of accounting IOU from the Treasury, or? If so, over time should we also expect to see fewer securities but also a larger 'cash or accounts receivable' balance on the Fed's balance sheet?
I'm sure it's some "technical" issue as you describe - they'll always have an excuse. It just seems absurd to me that they are buying anything at this point, since the main thing QE does is boost wealth inequality. They're at almost $9 trillion. Just stop buying, and maybe let the maturing stuff roll off. They can't even seem to do that.
That "just stop buying" approach would definitely be the simplest and cleanest way for the Fed to proceed.
Seeing this (more or less echoing Ashton's take above) about how their current approach seems to be "let maturing stuff roll off, then buy less"?
https://www.cfo.com/strategy/the-economy/2022/04/federal-reserve-fomc-taping-monetary-policy-inflation/
"The Federal Open Market Committee informally agreed to lower its $8.9 trillion in holdings by a maximum of $60 billion in Treasuries and $35 billion in MBS each month. The securities won’t be sold but instead will be allowed to “roll-off” — holdings will decline as principal payments come in and less is reinvested."
And maybe if they're feeling bold and frisky ... ;)
"However, FOMC members said they could consider outright sales of agency MBS once the balance sheet runoff gets underway."
A summary of my thoughts on all this is "The Fed is full of shit." https://www.reddit.com/r/RudyHavenstein/comments/ut7bsk/steve_bregman_on_why_the_fed_is_going_to_try_to/
Isn’t 10 B just a rounding error of cash lost in 1 penthouse hot tub at the Fed?
Absolutely, but the optics to me is horrible for them. They're STILL monetizing? Come on. And NOBODY asks them about this. My thesis is that the Fed is full of shit.
I agree at least 420.69% and never quit what you do!
The right people dgaf as you know. Banana republics banana republic until you know.
You know what they say, you can't taper a ponzi.
And wallstreet continues to rally.
Where’s mainstream media?
The Fed reporters all think the Fed is God. They just want to be invited back to the pressers and write their obsequious books praising the Fed they report on.
Strikes at the heart of real debate among our presstitute class, is the one true God at the Fed or CIA or Gates Foundation or WEF? So many luminary experts awash in praise and adoration with so many think tank endorsements to choose from.
Ponzi gonna keep on Ponziing
FED's gotta right size the curve. Otherwise it will stay inverted. https://www.newyorkfed.org/research/staff_reports/sr913.html
That isn’t one of their mandates
It's what they do regardless. The challenge is they are stuck. Do what America needs? Or, do what the world needs?
That's the unfortunate undertaking when you sign up to be the world's reserve currency.
Until now, for roughly 64 years, they could easily do what America needs and seasonally adjust all the numbers or massage them into a pretty picture for the global financial system. That game has run it's course.
JPows gotta cap the rising 10y yield
If you had once lost the trust of the people you had to look after then, you have lost their respect forever. Abe Lincoln.
Just normal operations. All is well.