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JPM: $2T could be “injected!”

Summary:
Nice figure of speech “injected!”… wow…They are referring to the T of reserve balances currently in the RRP… why are they in that Fed account and not in Depository accounts where they could be utilized to settle unanticipated withdrawals without requiring sales of other HQLA at current reduced prices due to the dumb monetarists rate increases?Why did the dumb Art degree people at the Fed reduce the RRR from 10% to 0% in the first place?What is bad about requiring Depositories to maintain a ready USD balance of direct CB liabilities of  a small 10% of their deposit liabilities in case of unanticipated withdrawals?If the deposits flow to another depository (ie withdrawals) from available reserve balances that transaction actually INCREASES the Depository’s SLR with ZERO effect on

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Nice figure of speech “injected!”… wow…

They are referring to the $2T of reserve balances currently in the RRP… why are they in that Fed account and not in Depository accounts where they could be utilized to settle unanticipated withdrawals without requiring sales of other HQLA at current reduced prices due to the dumb monetarists rate increases?

Why did the dumb Art degree people at the Fed reduce the RRR from 10% to 0% in the first place?

What is bad about requiring Depositories to maintain a ready USD balance of direct CB liabilities of  a small 10% of their deposit liabilities in case of unanticipated withdrawals?

If the deposits flow to another depository (ie withdrawals) from available reserve balances that transaction actually INCREASES the Depository’s SLR with ZERO effect on Capital…

Hard to understand how the Art degree brain works… 🤔







Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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