Loading ...Absolutely Crazy
So while the FED is suposedly tightening monetary policy to fight inflation by raising interest rates and finally starting QT with one hand, they are paying out almost $250 million dollars every day in interest which they have to create out of thin air, with the other hand. The amount will rise significantly after each additional increase in Fed funds, if the FED keeps raising rates at future meetings. This wasn’t an issue before because rates were close to zero and these facilities only really started in Sept. 2019 and have grown hugely since. https://www.zerohedge.com/markets/fed-quietly-handing-out-250-million-handful-happy-recipients-every-single-day
Yes, the confirm we all have been waiting for. Draghi is giving 80 billion away to the peeps to afford heat and California is handing out a new round of cash. Gold has not cared for years so I still await the war drums for a budge up.
Really disturbing.
The Fed probably has to pay FFR for Bank Reserves parked at Fed to keep them there, and limit bank lending. Otherwise, money stock would grow faster and inflation would further expand. Although I suspect bank lending appetites (to private sector) are waning some now.
The Reverse Repo game is out of hand. And its been awhile since Poznar has much to say about it.
Sundance made a point about how he learned that everyone in DC only knew a piece of the puzzle, and no one had the big picture.
I bet its the same for global finance. At some point, WE ALL get blind sided by something no one can manage.