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Here's the "No BS" macro news for today. -The Fed projected, back in early 2024, that they would likely end balance sheet reduction around this time and transition toward gradually increasing their balance sheet in line with nominal GDP (so that banks' fractional reserve lending remains unaffected with current regulations). -It got pulled forward slightly, perhaps two or three months, by the government shutdown overfilling the Treasury cash account (i.e. sucking cash out of the broader financial system). -The Fed previously announced they would stop reducing their balance sheet. Today they said they would start gradually increasing it. Powell said the baseline is $20-$25 billion per month, but due to current liquidity shortages and April tax day (which drains liquidity), they plan to increase it by $40 billion per month through April (which afterward in May, conveniently, is when Powell will be replaced as chairman with a presumably more dovish chairman). -They're focusing on printing money to buy short-term duration Treasuries, not long-term. This is for the financial system, not economic stimulus per se, and so they won't be calling it QE. -The Fed will now be structurally expanding their balance sheet while inflation is above their own target. -This is a gradual print scenario. It's bullish for liquidity and liquidity-correlated assets, in general. It's not explosively bullish, but it does lean dovish. -Nothing stops this train.
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Replies (58)

↩ replying to npub1wgpe...d2ek
Never..? I am not American either. The question is, why you don't ask if it's even more unamerican to destroy the purchasing power of your population (the American people) because you want to bailout the system you and your friend are benefiting from (meaning bankster, burocrats, politicians etc etc). Why isn't unamerican to destroy the tool your people use to save their energy, power, time and property?
↩ replying to IntuitiveGuy☯️
It’s a survey of publicly available prices. If you don’t wanna believe it that’s fine but not based on evidence, just conspiracy theory. You’re saying that the fed is somehow the enemy of the people since it can’t control inflation, so people should buy an asset that has fallen 30% in a few months… to avoid losing purchasing power that has lost less than 1% in that time due in a large part to powell keeping rates above cpi….
↩ replying to npub1wgpe...d2ek
Who sayd FED can control inflation??!! FED can try to control only SOFR, Secured Overnight Funds Rate.. INFLATION you talking about (price raises) is a completely different thing, and comes from market, from supply and demand, and many other different factors, and you have monetary inflation, price inflation and so on, so CPI, counts just a basket of things, that constantly changes in order to fit the narrative. The items in the basket change constantly. Monetary inflation is an average of 8% per year. I am saying the FED and the Government spending is the problem.
↩ replying to IntuitiveGuy☯️
My main point is that you’re a moron that has to continually tell everyone that usd collapse would be good for americans, that american institutions hate their people, inflation is 8% despite every source saying that isn’t possible or his entire worldview collapses. And you have to support charlatans like Lyn who give you convincing alternatives while cashing in on your hope (in fiat)
We had an entire Bitcoin bull run into QT. I see it as mostly ETF driven, no surprise the shitcoin complex didn’t join in. Anyway, people turning bearish here are weird to me - distinctly remember 4y ago this time saying “Fed is about to start QT, can’t see this going much further”. We going up