All Macro-Thematic Trend Reports:

Fed, Treasury implement de facto Yield Curve Control for banks as JPM accelerates its exposure to physical gold (FFTT, 3/22/23)

In plain English, the Fed’s BTFP amounts to a soft version of Yield Curve Control (YCC), but only for banks with US branches – the USTs on bank books were trading at a discount to par, but via the BTFP, banks can now put those bonds to the Fed at par…i.e., the Fed is de facto capping UST yields below the current market price, for the year term of the BTFP (we suspect it will

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Initial thoughts on Fed/Treasury moves: TLT up, oil down are the wrong reactions; this is inflationary. (FFTT, 3/14/23)

U.S. regulators on Wednesday issued rules for banks to hold enough easy-to-sell assets to keep them afloat during a crunch, after many were caught short of cash during the 2007-09 financial crisis.  “Liquidity squeezes were the agents of contagion in the financial crisis,” Federal Reserve Governor Daniel Tarullo said. “The (new rule) makes such squeezes less likely by limiting large banks from taking on excessive liquidity risk.” The Federal Reserve said big U.S. banks would

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“Some Unpleasant Monetarist Arithmetic” -Minneapolis Fed 1981 white paper (FFTT, 3/7/23)

Raising rates exacerbates deficit-driven inflation.  Cutting rates encourages more lending-driven inflation [FFTT: And weak USD-driven inflation.] Rock and a hard place.-Lyn Alden, 2/19/23, via Twitter One way the public’s demand for bonds constrains the government is by setting an upper limit on the real stock of government bonds relative to the size of the economy. Another way is by affecting the interest rate the government must pay on bonds. The extent to which these constraints

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