Fed is thinking about a new Standing Repo Facility. This post explains what a SRF is, how our current SRFs operate, and why the new SRF would have no market impact.
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GSIBs are issuing lots of debt even though the banking system is overflowing with liquidity. Their actions must be understood through the lens of Basel III. This post reviews the NSFR, GSIB STWF, and TLAC to show why issuing debt makes sense
What happens if SLR relief is not renewed? This post explains the SLR, what the "right" policy response would be, and explores potential market impacts if relief is not renewed.
It’s likely that bills will trade negative in the coming days as Treasury pays down existing bills. In this post I will discuss why large paydowns would push bill yields negative, the mechanics behind how IOR/ON RRP adjustments work and whether they make sense now, and other potential policy options to keep bill yields positive.
This post describes the TGA, the mechanics of the upcoming massive TGA decline, and how it might affect markets.
Sovereign debt that is purchased by the central bank, and where maturing principal is reinvested, is effectively debt that has been cancelled. This post walks through the mechanics of the modern day debt jubilee, and how it is also indirectly a private debt jubilee.
The shape of the yield curve is not just about what the Fed is doing, but also where along the curve the U.S. Treasury is issuing debt. The Treasury's most recent quarterly refunding statement suggests that massive curve steepening is taking place.
This post describes the Money Multiplier and shows why it is nonsense. Banks are never constrained by reserves because they can either borrow more reserves, manage their liabilities differently, or avoid the issue altogether by moving activity off-shore.
In the modern financial system, Treasuries are money. While the Fed printer can goose financial assets, the Treasury's printer directly boosts economic growth and inflation. This post will show you why: