by Announcement from Fed here yesterday: They have been reducing the amount of these daily purchases from B per day back in March when they were crashing the whole thing (before Treasury increased their rate of UST issuance)... then down to B/day... then /day .... and last week's B/day... and now next week B/day...Last week the Treasury was doing "pop up" issues of Cash Management Bills (CMBs) in equal amount per day that was the Fed's policy of the B/day: We can watch what Treasury does next week with these CMB issues if they adjust the daily amount down to match the Fed's B/day then we can perhaps assume Treasury is NOW operating with purpose to counteract the Fed policy $ via CMBs in order to prevent another catastrophic collapse in Depository leverage
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Announcement from Fed here yesterday:
They have been reducing the amount of these daily purchases from $75B per day back in March when they were crashing the whole thing (before Treasury increased their rate of UST issuance)... then down to $60B/day... then $50/day .... and last week's $30B/day... and now next week $15B/day...
Last week the Treasury was doing "pop up" issues of Cash Management Bills (CMBs) in equal amount per day that was the Fed's policy of the $30B/day:
We can watch what Treasury does next week with these CMB issues if they adjust the daily amount down to match the Fed's $15B/day then we can perhaps assume Treasury is NOW operating with purpose to counteract the Fed policy $4$ via CMBs in order to prevent another catastrophic collapse in Depository leverage ratios...
The other thing to observe is what will happen to bond prices as the Fed purchases becomes less dominant as a % of what Treasury is net issuing every day... will they go UP?
Lots to observe next week...