Fed Archives

The Fed’s Liabilities: How Far Can QT Go? What’s the Lowest Possible Level of the Balance Sheet without Blowing Stuff Up?

March 23, 2024 Stu Turley

Reserves, Domestic ON RRPs, Currency in Circulation, the TGA, and official foreign RRPs determine how far QT can go. By Wolf Richter for WOLF STREET. The Fed has been talking a lot about its liabilities recently, including Powell […]

Fed Still Sees 3 Rate Cuts in 2024, But 2-Cut Scenario only 1 Participant Short, Holds Rates at 5.50% Top of Range, QT Continues as Planned

March 20, 2024 Mariel Alumit

Raises longer-run rate projection (higher for longer), and projections for inflation and GDP in 2024. By Wolf Richter for WOLF STREET. FOMC members voted unanimously today to maintain the Fed’s five policy rates, with the top of its […]

Fed’s QT Going Forward: the Treasury Maturity Schedule & Roll-off under Current QT Plan, and How a New QT Plan Might Fit

March 11, 2024 Stu Turley

Treasury QT will naturally slow in June 2025 when the Fed runs out of T-bills. Fed governors have teased us with interesting options. By Wolf Richter for WOLF STREET. The Fed has started laying out some basic principles […]

There’s a “New Upside Risk” in Town: “Pent-up Exuberance” – Fed’s Bostic

March 5, 2024 Stu Turley

If it’s unleashed at the “first hint” of a rate cut, it “would create upward pressure on prices.” But it may be too late, it has been unleashed by rate-cut mania. By Wolf Richter for WOLF STREET. Atlanta Fed […]

Gold price hits two-month high as momentum builds for Fed rate cut

March 1, 2024 Mariel Alumit

Gold prices rose by nearly 1.5% to a two-month high on Friday as disappointing US factory data and a drop in consumer sentiment reinforced bets on the possibility of interest rate cuts later in […]

Fed Balance Sheet QT: -$1.34 Trillion from Peak, to $7.63 Trillion, Lowest since March 2021

February 2, 2024 Stu Turley

By Wolf Richter for WOLF STREET. The Fed’s Quantitative Tightening continued on track in January. Total assets on the Fed’s balance sheet dropped by $51 billion in December, to $7.63 trillion, the lowest since March 2021, according to […]

Wow, Fed’s Statement Pushes Back against Rate-Cut Mania and End-of-QT Mania. Holds Rates at 5.50% Top of Range, QT to Continue as Planned

January 31, 2024 Stu Turley

Ok, so that push-back in the statement was unexpected. By Wolf Richter for WOLF STREET. The FOMC statement released today by the Fed after its two-day meeting pushed back aggressively against the market’s massive rate cut expectations this […]

Fed’s Balance Sheet QT, Liabilities: RRPs -$1.78 trillion from Peak, to $590 Billion, but Reserves Rise to $3.6 Trillion as Liquidity Drains and Shifts

January 19, 2024 Stu Turley

RRPs heading to their normal level of zero. And it’s time to talk about the revived Standing Repo Facility. By Wolf Richter for WOLF STREET. As the Fed’s Quantitative Tightening hums along on autopilot, its assets have fallen […]

Fed Balance Sheet QT: -$1.28 Trillion from Peak, to $7.66 Trillion, Lowest since March 2021. Banks Got an Arbitrage Opportunity when Yields Dropped

January 5, 2024 Stu Turley

The Fed has shed 31% of the Treasury securities it had added during pandemic QE. By Wolf Richter for WOLF STREET. The Fed’s Quantitative Tightening (QT) hums along on autopilot. But the banks have figured out since one-year […]

Fed holds rates steady, indicates three cuts coming in 2024

December 14, 2023 Mariel Alumit

The Federal Reserve on Wednesday held its key interest rate steady for the third straight time and set the table for multiple cuts to come in 2024 and beyond. With the inflation rate easing and […]