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Thursday, October 22, 2020

Fed Balance Sheet Rises Above $7 Trillion; Bond ETF Holdings Hit $1.8 Billion

After crossing back above the $4 trillion mark back in October 2019 in the aftermath of the JPMorgan repo bailout, also known as "No QE", the Fed's balance sheet is nearly double that amount a little over half a year later, with the Fed reporting in its latest H.4.1 report that as of May 20,…

The Fed’s Balance Sheet Will Expand By 38% Of GDP, More Than Double QE1,...

Authored by Chetan Ahya, chief Morgan Stanley economist and global head of economics The 1Q GDP data releases for the US and euro area this week provide official confirmation of what we have known for some time – the recession has started. However, we remain of the view that this downturn will be sharper but…

The Fed’s Balance Sheet: The Other Exponential Curve

As the threat of COVID-19 keeps millions of Americans locked down at home, businesses and financial markets are suffering. For example, a survey of small-business owners found that 51% did not believe they could survive the pandemic for longer than three months. At the same time, the S&P 500 posted its worst first-quarter on record. In response…

US Treasury Cash Balance Hits Record $750 Billion After Historic Flood Of Bill Issuance

It may not quite be last week's $563 billion T-bill deluge, but it will do. After a tsunami of new T-Bill and Cash Management Bill issuance last week, which saw no less than $85 billion in new short-term debt issued every every day except Friday, sending the Treasury's cash balance soaring to new all time…

Fed Balance Sheet Hits $5.5 Trillion As Discount Window Usage Soars

As previewed last night when we showed that in the past week the Fed has bought a staggering $587BN in Treasuries and MBS, we calculated that as of March 25, the Fed's balance sheet would rise to a record $5.3 trillion, a phenomenal increase of $1.2 trillion in just the past two weeks, equivalent to…

Unstable Balance Between Finance & Economy Accelerated Equity Market Decline

Authored by former Alliance Bernstein Chief Economist Joseph Carson, Uncertainty surrounding the global economic and financial implications of the fast spreading coronavirus was the catalyst for last week’s sharp drop in the US equity market. Yet, the speed and the scale of the decline were also influenced by how far finance had separated from the…

Fed’s Balance Sheet Soars Above $4 Trillion: Up $250 Billion Since Repo Crisis

If it seems like it was just over a month ago that the repo market suddenly suffered its biggest cardiac arrest since the financial crisis, when overnight repo rates exploded from 2% to 10% in an instant with no observable news or catalyst on the 11th anniversary of Lehman's collapse... ... and only immediate Fed…
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