THEY JUST TURNED THE PRINTER BACK ON. AND NO ONE NOTICED.
Everyone is debating the 25bps rate cut or the "split vote." You are missing the forest for the trees.
Buried in today's announcement was the smoking gun: The Fed will resume buying Treasury securities starting Friday.specifically $40 Billion per month in T-Bills.
Let me translate Fed-speak for you:They call it "Balance Sheet Management." I call it Soft QE. I call it Monetizing the Debt.
The 9-3 split vote (first since 2019) proves the consensus is broken. The board is fighting itself.
By buying $40 BILLION in T-Bills, they are admitting the private market CANNOT absorb the US debt issuance without help.
TThe "Dot Plot" signals a pause, but their actions signal... you guessed it, LIQUIDITY.
Ignore the "hawkish" rhetoric. Watch the liquidity. When the Fed becomes the buyer of last resort for the Treasury, the dollar is being sacrificed to save the bond market.
This is exactly why we hold assets with no counterparty risk. The liquidity floodgates just cracked open.
Position accordingly.
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THEY JUST TURNED THE PRINTER BACK ON. AND NO ONE NOTICED.
Everyone is debating the 25bps rate cut or the "split vote." You are missing the forest for the trees.
Buried in today's announcement was the smoking gun: The Fed will resume buying Treasury securities starting Friday.specifically $40 Billion per month in T-Bills.
Let me translate Fed-speak for you:They call it "Balance Sheet Management." I call it Soft QE. I call it Monetizing the Debt.
The 9-3 split vote (first since 2019) proves the consensus is broken. The board is fighting itself.
By buying $40 BILLION in T-Bills, they are admitting the private market CANNOT absorb the US debt issuance without help.
TThe "Dot Plot" signals a pause, but their actions signal... you guessed it, LIQUIDITY.
Ignore the "hawkish" rhetoric. Watch the liquidity. When the Fed becomes the buyer of last resort for the Treasury, the dollar is being sacrificed to save the bond market.
This is exactly why we hold assets with no counterparty risk. The liquidity floodgates just cracked open.
Position accordingly.