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Fed Cuts Pace Of Treasury QE To Just $8 Billion Per Day
From an initial $75 billion per day when the Fed announced the launch of Unlimited QE in March, the US central bank first reduced its daily buying to $60 billion per day, then four weeks ago announced another 'taper' in its bond-buying program to $50 billion per day, which was followed by a reduction to 30 billion per day, which was then again cut in half to $15 billion per day. Then, last week the Fed again slashed its daily POMO by another 33%, to $10BN per day, and now in its latest schedule, the Fed unveiled that in the coming week it would purchase "only" $8BN per day. Contrary to some expectations that the Fed would only announce a month POMO total, the Fed continued the practice of providing a weekly preview of its purchasing operations, which in the coming week will amount to $40BN in TSYs.
Here is the full schedule of Treasury purchases for the week ahead. Note the increasing divergence between some days of the week, such as the $4.5BN in POMO on Monday vs the $13BN on Tuesday.
Additionally, the Fed will also taper its MBS buying from $8 billion to $6 billion on average in MBS per day next week:
Mon: $6.16Bn from $8.213BN last Monday
Tue: $5.76BN from $7.68BN last Tuesday
Wed: $6.16BN from $8.213BN last Wednesday
Thur: $5.76BN from $7.68BN last Thursday
Fri: $6.16 from $8.213BN last Friday
So, in aggregate, the Fed will buy a total of $70 billion of MBS/TSYs next week, down from $90 billion but still vastly more on a weekly basis than the largest QE programs monthly totals before this crisis, if well below the $625 billion in purchases conducted in the week starting March 23, when the financial system was once again on the verge of collapse and only the Fed could bail it out… just don't call it a bail out because nobody could have possibly anticipated an economic shock especially after banks repurchased trillions in their own stock in the past decade. Meanwhile, as we showed last night, as of April 29, the Fed's balance sheet was a satanically record $6.66 trillion, up $82.8 billion on the week and up $2.5 trillion from a year ago. Just staggering numbers and unprecedented attempts at dollar debasement, which however remains stubbornly strong as a result of the ongoing $12 trillion global US dollar short squeeze. Finally, for those curious what the "helicopter money" big picture looks like, now that the Fed and Treasury are merged with the Fed stuck monetizing Treasury issuance indefinitely, here it is: as we reported last week when the Fed did QE in the years following the 2008 financial crisis monthly Treasury purchases never exceeded US Treasury net issuance,but the Fed is now on track to buy double the amount of net issuance.
https://www.zerohedge.com/markets/fed-cuts-pace-treasury-qe-just-8-billion-day
because derivatives….
VENUS31 Clipper on final at JBA from Wilmington Int'l Airport
WING44 C-560 sw from McGuire AFB, NJ- stop at Sandusky, OH from origin of Dobbins AFB
Turkish AF OAN2903 arriving from RAF Mildenhall
this sort of assumes moar of a controlled FRBNY (and that is a fatal thing to do) through the oversight placed on them via munchkins' reporting to POTUS. Pretty sure they have the bulk of the (mostly) real stuff now-and that is certainly a stretch calling paper backed crap real-the derivative positions that, in a reset, are worth nothing.
Which is why the scale back. What they have left (banks/primary dealers etc) are the re-hypothecated crap that is worthless although they always assign full value to it on books.