FOUNDERS SPECIAL: When is QT not QT?
WHY QT is OVER/ NOT OVER
Dear Goldfix Readers:
This is a combination of facts, data, and evidence intended to give you a working basis for understanding everything else going on. We use the word FED here not as the Central Bank, but as the Federal government since the Treasury, the Fed, and every one else are working together.
Rather than give you blow by blows or complicated explanations we think the best thing is to lay out the goals, intentions, and likely pathways as this is dynamic and new terms and facilities will be thrown out frequently.
We truly want to give you a grass roots bottom line comment and let you then digest the other stuff you come across in that framework from ZH and others.
Which tools or how the Fed uses them is of extreme tactical importance for decision analysis but one must first understand their intentions and shortcomings as this thing unfolds… This is about 1500 hopefully easily readable words and familiar concepts
The Problem
The Goals and Path the Fed is planning
The Current Mechanisms used to obtain those goals
What the Banks involved will likely do
Quick Comment about Pivot/No pivot/ Balance sheet stuff
Is QT Over?
Very important excerpt from a favorite credit poster
JPM’s absolute latest assessment on this
1- The Problem
Many regional banks do not have enough money on hand due to poor interest rate risk mgt. As rates go up and easy money for their mismanagement ends this has an effect of a tide going out revealing who is naked and who is not.
Smart depositors either by insight or tips from banks like JPM pulled their money out.. just like in the movie.